MOODY’S Investor Service (Moody’s) has affirmed the “Baa2” local and foreign deposit rating for two leading banks in the Philippines: BDO Unibank Inc.(BDO) and the Metropolitan Bank and Trust Co. (Metrobank).
In a report issued on Tuesday, Moody’s affirmed BDO and Metrobank’s Baa2 baseline credit assessments (BCA) maintaining a stable outlook for both banks.
According to its report, the affirmation of BDO’s Baa2 deposit and senior unsecured debt rating is based on the bank’s BCA of Baa2, and that Moody’s expects a very high probability of the bank receiving systemic support from the Philippine government in times of need.
It pointed out that its rating for the bank took into account BDO’s domestically focused, prominent, and growing franchise, stable asset quality and loss absorbing buffers; sufficient capital levels that exceed the regulatory minimum; stable profitability, supported by a gradual
expansion in net interest margins; and robust funding and liquidity profile.
Furthermore, BDO’s funding and liquidity profile was reported to remain a key credit strength, as it has one of the highest shares of low-cost current-account and savings account deposits of around 70 percent as of end-September 2018.
BDO reported its total assets as of end-September 2018 to reach P2.9 trillion or $55.7 billion.
For Metrobank, Moody’s also said that the bank’s Baa2 deposit rating is underpinned by its Baa2 BCA and the expectation of a very high probability of support from the government of the Philippines.
The rating reflects the bank’s strong franchise in the corporate and consumer segments of the domestic market as the second-largest bank in the Philippines by assets; robust capital and liquidity; stable asset quality, which reflects the bank’s discipline and prudence in growing its business; and relatively high credit risk concentration, exposing the bank to single-name credit events or industry-specific cyclicality.
“Metrobank’s funding and liquidity remain robust, reflected by its large base of current and savings deposits, which account for 62 percent of the bank’s total deposits as of the end of September 2018, as well as its large stock of liquid assets primarily in the form of cash and Philippine government securities,” Moody’s said.
The bank reported its total assets of P2.1 trillion or $40.5 billion as of end-September 2018.