UnionBank scores Baa2 rating from Moody’s with strong profits, loan growth
The bank’s impressive bottom line deemed it credit-worthy.
The Union Bank of the Philippines snagged a Baa2 rating from Moody’s Investors Service, which is two ranks higher than junk status.
In a statement, the credit watcher cited the bank’s solid run so far, with its profits logging above industry average riding on growing lending operations.
“UnionBank’s return on assets is higher than most of its peer Philippine banks, underpinned by the strong growth of its high-yielding retail business and superior cost efficiency,” Moody’s said.
“Given management’s intention to pursue a more moderate pace of loan growth in 2018, Moody’s expects that the bank’s internal capital generation will be largely sufficient to support business growth.”
Although UnionBank has its deposit base concentrated on huge corporates, the bank maintains more than enough capital buffers and liquid assets on standby, with it likely to receive “moderate” funding support from the government in case things go awry.
UnionBank reported a P6.4 billion as of end-September, down by 21% from a year ago given the lack of trading gains. Loans grew by over 20 percent.