UCPB privatization to boost bank’s performance — Moody’s
The entry of a new owner will propel this bank to greater heights.
Moody’s Investors Service supported plans of the Philippine government to sell its majority stake at United Coconut Planters Bank (UCPB), with the legal hurdle now cleared after the Supreme Court lifted its halt order on the sale of coco levy-related assets.
“A successful privatization of UCPB will help the bank raise new equity capital to meet Basel III capital requirements, a credit positive. And, if a larger bank acquires UCPB, we expect that UCPB’s credit quality would benefit from the support of its new majority shareholder,” the global credit rater said in a statement.
The government owns 73.9% of UCPB, and has been infusing government funds to support the bank’s 10-year rehabilitation plan after the global financial crisis. The budget for the plan ends in 2018, with the Department of Finance not keen on spending more beyond that.
“Although no details have been released by either the government or the bank, we expect the terms of the recapitalization plan by first-quarter 2018, shortly after the government and the bank restart the planning work that was done during the last privatization attempt,” Moody’s added.