Moody’s Investor Service on Thursday announced that it is keeping its investment grade credit rating of Baa2 for Security Bank with a stable outlook.
Moody’s said they kept Security Bank’s ratings and stable outlook as the bank displayed strength from its robust capitalization and stable profitability despite economic disruptions from the pandemic.
A stable outlook from a major credit watcher means the ratings agency expects no significant changes in the bank’s credit rating in the 12 to 18 months.
Security bank’s Common Equity Tier 1 (CET1) capital ratio increased to 19.1 percent as of 30 September 2020 from 17.1 percent a year earlier. CET 1 is considered the highest quality among instruments eligible as bank capital.
Also, as of end-September, Security Bank’s shareholders’ capital hit 124 billion, up 5 percent from year-ago level. Its total Capital Adequacy Ratio has increased to 19.9 percent from 18 percent a year ago. The bank’s total assets stood at P651 billion.
Moody’s recent move for Security Bank is in contrast with its latest decision for Rizal Commercial Banking Corp. (RCBC) and Philippine National Bank (PNB), where they reverted the banks’ “stable” outlook to “negative” to reflect coronavirus-induced economic shocks on local enterprises.
A negative outlook means these banks could be up for a downgrade in the next 12 to 18 months, depending on their conditions upon reassessment.
“Our strong capital position is an important pillar which both our clients and employees can rely upon to weather the challenges brought by the Covid-19 pandemic,” Security Bank President and CEO Sanjiv Vohra said.
“That capital will be deployed to support our clients’ pandemic recovery efforts, employee health & safety initiatives, and investments in systems and technology to deliver better banking,” he added.