BDO Unibank : Fitch upgrades BDO affirms rating for BPI, Metrobank, Landbank

MANILA, Philippines - London-based Fitch Ratings has upgraded the credit rating of BDO Unibank Inc. and at the same time affirmed the ratings of Ayala-led Bank of the Philippine Islands, Metropolitan Bank and Trust Co.as well as two government financial institutions. The debt watcher upgraded BDO's Long-Term issuer default rating (IDR) and viable rating to "BBB-" or minimum investment grade from "BB+"or speculative status on the back of stable outlook."Combined with our assessment of BDO's franchise strengths and our expectation the bank will maintain its capitalization in line with peers, contributes to the upgrade of BDO's ratings. BDO's Short-Term IDR and senior debt ratings have been upgraded in tandem," Fitch said in a report.BDO's senior notes are rated at the same level as its Long-Term IDR because the notes constitute direct, unsubordinated and unsecured obligations of the bank, and rank equally with all its other unsecured and unsubordinated obligations. The ratings on BDO's senior debt have been upgraded to "BBB-" following the upgrade in BDO's ratings.BDO's NPL ratio continued to improve, to 12 percent of gross loans at end-2015 from 15 percent in end-2014. element-invisibleBusiness ( Article MRec ), pagematch: 1, sectionmatch: 1 On the other hand, the rating agency affirmed the 'BBB-' ratings and stable outlooks on the long-term IDRs of BPI and Metrobank.Fitch explained the IDRs of all three banks and National Long-Term Ratings of BPI and BDO are driven by the banks' viability ratings. "We assign a higher National Rating to BPI to reflect its stronger intrinsic profile.The banks' broad branch networks and strong deposit franchises underpin their stable funding and liquidity profiles, which are key rating strengths - in particular for BPI," it added. In addition, Fitch expects sustained remittance inflows and service export receipts to support domestic liquidity as well as banks' access to foreign currency.The debt watcher said BPI's ratings reflect its sound balance sheet and steady financial performance over the years with its current and savings accounts comprising a significant 72 percent of total deposits compared with BDO's 68 percent and Metrobank's 56 percent. Likewise, BPI's loan to deposit ratio was at a modest 70 percent compared with Metrobank's 70 percent and BDO's 77 percent."BPI's asset quality is underpinned by its established risk culture and blue-chip clientele, and the bank's healthy profitability and capitalization provide a substantial buffer against credit shocks," it said. It added Metrobank's ratings are supported by its improved asset quality backed by prudent underwriting standards and controls, adequate capital ratios and a stable funding profile.Metrobank's non performing loans (NPL) ratio remained steady at 099 percent at end-2015 while its loan growth was close to the higher end of the peer group at 16 percent compared with BPI's nine percent and BDO's 17 percent. "Barring any capital management measures, the three banks' capital positions are likely to decline over time amid strong loan demand.In this environment, Fitch expects the banks to take action from time to time to maintain healthy capital buffers above regulatory requirements. Meanwhile, Fitch also retained the rating of Landbank and DBP at "BB+" on the back of a positive outlook.Fitch said the ratings of the banks take into account the steady improvement in the Philippine operating environment over the last several years.© Pakistan Press International, source Asianet-Pakistan

Related posts