Global debt watcher Moody’s Investors Service said Monday the exposures of five major domestic banks to shipbuilder Hanjin Heavy Industries and Construction Philippines is credit negative because they will reduce their profits.
The Bangko Sentral ng Pilipinas earlier confirmed that BDO Unibank Inc., Bank of the Philippine Islands, Land Bank of the Philippines, Metropolitan Bank & Trust Co. and Rizal Commercial Banking Corp. had loan exposures totaling $412 million to South Korean shipbuilder Hanjin’s Philippine subsidiary, Hanjin Heavy Industries and Construction Philippines, which filed for corporate rehabilitation last week.
“… The exposures are credit negative for the five Philippine banks because they will need to incur additional credit charges related to HHIC-Phil, which will reduce their profit,” Moody’s said.
All five banks enjoy investment-grade ratings of Baa2 with stable outlooks from Moody’s.
Moody’s said of the five banks, RCBC could be the one most affected because it had the largest exposure to Hanjin at around $140 million.
