The global credit watcher Moody’s Investors Service merited UnionBank with a positive assessment and assigned the lender a favorable credit rating for its performance.
In a statement, Moody’s assigned a “Baa2” rating to the bank’s long-term local and foreign currency IOUs along with a stable outlook. Moody’s also extended a “Baa3” assessment on its baseline credit as a reflection the bank’s strong profitability and return on assets.
“UnionBank’s ‘Baa3’ baseline credit assessment [BCA] reflects the bank’s above-industry average core profitability which is supported by its growing lending operations, in particular, its higher-yielding retail business and its superior cost efficiency relative to its domestic peers,” Moody’s said.
“In addition, the bank’s BCA incorporates its adequate capital generation and track record of strong support from key shareholders,” it added.
It also said UnionBank’s strong profitability supported the bank’s rapid business growth in recent years, without a material decline in its capital levels.
“Given management’s intention to pursue a more moderate pace of loan growth in 2018, Moody’s expects that the bank’s internal capital generation will be largely sufficient to support business growth,” Moody’s said.