Moody's affirms ratings of 3 Phl banks

Moody's Investors Service has affirmed the long-term deposit ratings of China Banking Corp., Philippine National Bank (PNB), and Security Bank Corp., citing strong capital position and stable profitability.

- KEISHA TA-ASAN

The deposit ratings for China Bank and Security Bank were kept at Baa2, which were likewise given a stable outlook.

"The affirmation of China Bank's and Security Bank's Baa2 ratings and baa3 baseline credit assessments reflect the bank's strong capital position that offsets their lingering asset risks, as well as their modest funding and adequate liquidity," the debt watcher said.

According to the debt watcher, China Bank's capitalization may continue to remain high over the next 12 to 18 months, while Security Bank's capitalization may decrease marginally.

This is "in line with Moody's Ratings expectations of their respective internal capital generation abilities and dividend payouts, as well as their accelerated loan growth," it said.

The profitability of China Bank, as measured by its return on assets, also remained strong at 1.6 percent in 2023. This is supported by stable net interest margins (NIMS) and lower provisioning costs.

On the other hand, Security Bank's ROA declined to 1.1 percent from 1.4 percent amid higher operating and provisioning costs.