China Bank gets ratings upgrade
Global credit rating agency Moody’s Investor Service has assigned an investment grade credit rating of “Baa2” to Sy family-led China Banking Corp. (China Bank) based on strong capitalization and support from key shareholders.
The investment grade rating puts China Bank in the same level as the Philippine sovereign rating and at par with the country’s top three banks—BDO Unibank, Metropolitan Bank and Trust Co. and Bank of the Philippine Islands.
Baa2 is the ninth highest rating in Moody’s 21 categories of long-term corporate obligation rating. Baa2 is deemed as a medium grade, suggesting that the issuer is subject only to moderate credit risk.
China Bank’s Baa2 rating incorporates its baseline credit assessment and a one-notch rating uplift, which was given in view of Moody’s assessment that the bank would receive support from the Philippine government in times of need.
The outlook on the long-term rating is stable, in line with the stable outlook on the Philippines’ sovereign rating.
China Bank’s rating “is underpinned by its long-standing relationships with Chinese-Filipino businesses, strong capitalization boosted by a P15 billion (around $300 million) rights issuance completed in May 2017, stable asset quality backed by a robust macroeconomic environment, and strong support from key shareholders, in particular Henry Sy-affiliated SM Investments Corp. and Sysmart Corp.,” Moody’s said in a statement. —DORIS DUMLAO-ABADILLA
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