“We revised the outlook on BPI to reflect our view that the bank’s asset quality and profitability could be impaired over the next six to 24 months due to challenging operating conditions,” said S&P analyst Ivan Tan.
For Security Bank, there’s a “one-in-three chance” for a credit rating downgrade as unsecured consumer loans and credit costs could negatively affect.its profits and erode capital, S&P said.
S&P sees the Philippine economy contracting by 9.5% this year, due to the ongoing Covid-19 crisis.
Meanwhile, Fitch Ratings downgraded its outlook on China Banking Corp. to negative in anticipation of stressed assets, higher credit costs and weaker earnings in the wake of measures taken to stem the spread of Covid-19.
“Weak domestic consumption and accelerating credit impairment are turning banks’ operating environment more challenging,” Fitch said.
“Revenue tailwinds from aggressive monetary easing are also likely to dissipate by 2H20, and we see further asset-quality deterioration in 2021 after the debt moratorium lapses,” it noted.