{"id":277305,"date":"2020-12-01T22:23:15","date_gmt":"2020-12-02T03:23:15","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=277305"},"modified":"2020-12-01T22:23:15","modified_gmt":"2020-12-02T03:23:15","slug":"fitch-ratings-sees-ph-banks-profitability-to-remain-stable","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2020\/12\/01\/fitch-ratings-sees-ph-banks-profitability-to-remain-stable\/","title":{"rendered":"Fitch Ratings sees PH banks’ profitability to remain stable"},"content":{"rendered":"
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Philippines banks\u2019 profitability is seen to remain stable due to higher loan growth and lower credit provisioning, factors which Fitch Ratings expects to counter the impact of reduced margins and lack of extraordinary trading gains. (Image: Solvency Ii Wire<\/a>)<\/figcaption><\/figure>\n
MANILA<\/strong>\u00a0\u2013 Philippines banks\u2019 profitability is seen to remain stable due to higher loan growth and lower credit provisioning, factors which Fitch Ratings expects to counter the impact of reduced margins and lack of extraordinary trading gains.<\/div>\n
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\u201cWe expect the deterioration in reported asset-quality metrics to accelerate in 2021 as debt moratoria mandated by regulations expire in December 2020, though the impact on profitability is likely to be cushioned by the banks\u2019 pre-emptive general provisioning in the preceding year,\u201d the debt rater said in a report dated Dec. 1, 2020.<\/div>\n
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The debt moratorium referred to pertains to the 60-day, one-time leeway mandated under Republic Act No. 11494, otherwise known as the Bayanihan to Recover as One Act.<\/div>\n
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The Bangko Sentral ng Piliipinas (BSP) has issued a memorandum requiring all covered institutions to apply the grace period for existing loans, current and outstanding, \u201cfalling due, or any part thereof, on or before December 31, 2020\u201d.<\/div>\n
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The report projects the effective implementation of the proposed Financial Institution Strategic Transfer (FIST) Act to aid banks on their impaired loans.<\/div>\n
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The proposed measure, it said, \u201cput the banks in a better position for recovery after 2021\u201d.<\/div>\n
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The report added the proposed measure, which is targeted to help banks divest non-performing loans (NPLs), \u201cwould hinder the recognition of impaired loans and make it difficult for the banks to assess borrowers\u2019 cash flow and determine their viability\u201d.<\/div>\n
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\u201cWe expect any extension \u2013in response to sustained weakness in certain segments\u2013to be more targeted,\u201d it said.<\/div>\n
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With net interest margin (NIM) seen to decline next year because of the total of 200 basis points reduction in the Bangko Sentral ng Pilipinas\u2019 (BSP) key policy rates this year, Fitch projects the central bank to keep its accommodative monetary policy stance.<\/div>\n
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Meanwhile, the report expects the drop in property prices in the country to have a \u201cmanageable impact on real estate loan quality as the banks are more heavily exposed to the larger developers with stronger finances\u201d.<\/div>\n
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\u201cHowever, a sustained or significant decline in property prices would have wider repercussions on the banks\u2019 balance sheets \u2013given the sector\u2019s high correlation with the broader economy and as it accounts for 20 percent of the banks\u2019 loan portfolios,\u201d it added.\u00a0<\/strong><\/em><\/div>\n","protected":false},"excerpt":{"rendered":"

MANILA\u00a0\u2013 Philippines banks\u2019 profitability is seen to remain stable due to higher loan growth and lower credit provisioning, factors which …<\/p>\n","protected":false},"author":44,"featured_media":271656,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-277305","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/277305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=277305"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/277305\/revisions"}],"predecessor-version":[{"id":277306,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/277305\/revisions\/277306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/271656"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=277305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=277305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=277305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}