{"id":88572,"date":"2017-02-08T21:18:19","date_gmt":"2017-02-09T02:18:19","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=88572"},"modified":"2017-02-08T21:18:41","modified_gmt":"2017-02-09T02:18:41","slug":"fitch-ratings-affirms-credit-stability-of-8-phl-banks","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2017\/02\/08\/fitch-ratings-affirms-credit-stability-of-8-phl-banks\/","title":{"rendered":"Fitch Ratings affirms credit stability of 8 PHL banks"},"content":{"rendered":"
\"Fitch<\/a>
Fitch Ratings affirms credit stability of 8 PHL banks (Photo by Hans Olav Lien – Own work, CC BY-SA 3.0,.<\/a>)<\/figcaption><\/figure>\n

MANILA\u2014Fitch Ratings on Wednesday affirmed the ratings of eight Philippine-based banks, including two government financial institutions, as it continues to see strong state backing and improvement of the the private banks\u2019 asset quality and profitability.<\/p>\n

In separate statements, the debt rater affirmed the \u2018BB+\u2019 rating with positive outlook on the long-term issuer default ratings (IDRs) of the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP).<\/p>\n

These ratings, it said, \u201creflect Fitch\u2019s expectation of extraordinary sovereign support for both banks in times of need.\u201d<\/p>\n

\u201dFitch believes that the sovereign would have a strong propensity to provide extraordinary support to DBP and LBP, if needed, given their full government ownership and policy mandate,\u201d it said.<\/p>\n

It explained that \u201cprobability of state support is assessed to be moderate overall, taking into account the sovereign\u2019s financial strength.\u201d<\/p>\n

\u201dDBP and LBP do not benefit from blanket government guarantees on their liabilities, have received capital support from the state only infrequently on an ad hoc basis and are required to remit dividends to the national government to support the sovereign coffers. These characteristics indicate the two banks’ self-sufficient operations, stemming from their largely commercial approach to lending, in our view,\u201d it said.<\/p>\n

The private banks whose ratings were also affirmed are Ayala-led Bank of the Philippine Island (BPI) \u2018BBB-\u2019; Sy-led Banco de Oro Unibank Inc. (BDO), \u2018BBB-\u2019; Ty-led Metropolitan Bank & Trust Company (Metrobank), \u2018BBB-\u2019; Henry Sy\u2019s China Banking Corporation (ChinaBank), \u2018BB+\u2019; Tan-led Philippine National Bank (PNB), \u2018BB+\u2019; and Yuchengco-led Rizal Commercial Banking Corporation (RCBC), \u2018BB+\u2019. Outlook on all these ratings is Stable.<\/p>\n

Fitch said ratings on BPI, BDO and Metrobank \u201creflect their strong domestic franchises, diverse revenue streams and adequate risk-management frameworks, which help to underpin their steady asset quality, above-average profitability and healthy balance sheet buffers.\u201d<\/p>\n

\u201cBPI\u2019s ratings also give credit for its historically prudent risk appetite, and superior profitability, and funding and liquidity metrics,\u201d it said.<\/p>\n

For the other three, Fitch said these \u201chave generally shown a greater appetite for growth in recent years as they seek to gain scale and share.\u201d<\/p>\n

\u201dBut Fitch expects that they will display broadly stable asset quality and profitability backed by acceptable risk controls as they grow.\u201d<\/p>\n

Fitch expects the banks to benefit from the positive outlook the credit rater have for the Philippine economy for the next two years due to resiliency of domestic consumption and strong investment growth.<\/p>\n

\u201cHeadwinds for overseas remittances and business-process outsourcing revenues – two important drivers of domestic consumption – may rise, but we still expect both inflow streams to remain broadly resilient for now in the absence of more pronounced and immediate threats,\u201d it said.<\/p>\n

\u201cThe current government’s plans to accelerate infrastructure spending should provide an added boost to domestic activity, and the authorities retain adequate policy flexibility to offset a weakening in economic conditions or greater financial market volatility. We expect credit growth in the mid- to high-teens against this backdrop,\u201d it added.<\/p>\n

As of end-December 2016, bank lending, excluding placements in the Bangko Sentral ng Pilipinas\u2019 (BSP) reverse repurchase (RRP) facility, remain strong with an expansion of 17.2 percent.<\/p>\n

Fitch forecasts gradual tightening of liquidity due to external factors and sustained credit growth.<\/p>\n

\u201cHowever, system liquidity should remain adequate given the significant pool of funds currently held with the central bank that can be released to meet demand when required,\u201d it added.<\/p>\n","protected":false},"excerpt":{"rendered":"

MANILA\u2014Fitch Ratings on Wednesday affirmed the ratings of eight Philippine-based banks, including two government financial institutions, as it continues to …<\/p>\n","protected":false},"author":33,"featured_media":88575,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[10426,14905],"class_list":["post-88572","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-development-bank-of-the-philippines","tag-land-bank-of-the-philippines","mauthors-joann-santiago","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/88572","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\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=88572"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/88572\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/88575"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=88572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=88572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=88572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}