Moody’s Investors Service has affirmed the long-term deposit ratings of the country’s three largest banks—Banco de Oro (BDO), Bank of the Philippine Islands (BPI) and Metropolitan Bank & Trust Co. (Metrobank)—citing their substantial liquidity and likelihood of sustaining profitability.
The deposit ratings for the three banks, both for foreign currency- and local currency-denominated deposits, were kept at Ba1, which is just a notch below investment grade.
The ratings were likewise given a “stable” outlook, which indicates the ratings are likely to remain the same at least over the short term.
The deposit rating indicates a bank’s ability to promptly meet its obligations to depositors when they decide to withdraw from their accounts.
“The affirmation of the Ba1 long-term deposit ratings of the three banks with a stable outlook reflects the strong liquidity and capitalization of the banks that continue to support the banks’ credit profiles at the Ba1 rating level,” Moody’s said in a statement.
“Moreover, we expect the steady trend of good profitability to continue and support the banks’ capital replenishment efforts as they pursue credit growth and prepare for higher capital requirements under Basel 3,” the credit watchdog added.
In January 2014, the Bangko Sentral ng Pilipinas will implement stricter capitalization requirements in compliance with Basel 3—an updated set of international standards on bank regulation.
Also, Moody’s said the financial strength rating (BFSR)/ baseline credit assessment (BCA) of BPI and Metrobank were revised to D+/ba1 from D/ba2, and that the outlook on the ratings are stable. The BFSR/BCA for BDO remains the same at D/ba2.
BFSR/BCA is a measure of a bank’s internal strength or its ability to stay resilient in times of shocks without getting liquidity support from external entities.