THE Japan Credit Rating Agency Ltd. (JCR) announced it has affirmed the investment grade rating of Security Bank Corp. amid the economic and health crises, on the back of the lender’s “strong financial durability.”
The credit watcher gave Security Bank an “A-“ investment grade rating with a stable outlook, the same level as JCR’s Philippine sovereign rating.
JCR said the rating reflects Security Bank’s relatively robust domestic business base, high profitability and solid capital base. The credit watcher also said it has incorporated into the rating the effects of the lender’s alliance with MUFG Bank.
“Security Bank’s financial durability stays strong as indicated by its high loan-loss provision coverage ratio and capital adequacy ratio in addition to its high profitability ensured by a high net interest margin”,” JCR said.
Security Bank’s non-performing loan (NPL) ratio is also expected to be “controlled at a manageable level if the economy recovers steadily as the pandemic subsides”. JCR attributed this to Security Bank’s strengthened credit management for individual borrowers.
Security Bank President and CEO Sanjiv Vohra welcomed that development and said that their current strong base will be used to pandemic recovery efforts and technological innovations.
“[JCR’s] affirmation of its credit rating for Security Bank is a testament to our strength as we continue to provide our customers with better banking services in these trying times,” Vohra was quoted in a statement as saying. “Our strong capital position is an important pillar which both our customers and employees can rely upon to weather the challenges brought by the Covid-19 pandemic.”
“That capital will continue to be deployed to support our clients’ pandemic recovery efforts, employee health & safety initiatives, and investments in systems and technology to deliver on our promise,” he added.
Data from the financial intermediary showed its provision coverage ratio is at 115 percent at the end of 2020. The bank’s consolidated common equity Tier 1 ratio stood at 19.2 percent at the end of 2020.