PH banks can support growth – Fitch Ratings

Credit watcher Fitch Ratings reiterated in a report that Philippine banks are well-able to support growth and is supported in turn by the country’s sustainable economic expansion in the near term. In its latest ratings decision, Fitch Ratings upgraded its credit score on two government banks, Land Bank of the Philippines and Development Bank of the Philippines, on its Long-Term Issuer Default Ratings (IDRs) to “BBB-” from “BB+” with stable outlooks, after the December 10 upgrade on the sovereign ratings. Fitch Ratings said it has also revised upwards the Support Rating Floors (SRFs) of DBP and Landbank, as well as six private banks. These are Bank of the Philippine Islands (BPI), BDO Unibank Inc., Metropolitan Bank and Trust Co. (Metrobank), China Banking Corp. (CBC), Rizal Commercial Banking Corp. (RCBC) and Philippine National Bank (PNB). According to Fitch Ratings, the SRF revisions were decided on due to an improving sovereign fiscal profile, which it said was one of the reasons for the sovereign ratings upgrade. “This strengthening sovereign profile should enhance the state’s ability to provide extraordinary support to the banks, if needed.” It added: “The ratings on DBP and Landbank also reflect our expectation that the sovereign’s propensity to provide extraordinary support to both banks remains high in times of need, owing to their unique policy mandates, full government ownership and systemic importance.” Landbank, the largest of the two in terms of assets size, control 10 percent of the banking system. DBP has four percent. (LCC)