PSBank’s credit rating kept at highest level
PHILIPPINE SAVINGS BANK (PSBank) got the highest grade from Philippine Rating Services Corp. (PhilRatings) as the lender maintained its solid capitalization and prudent loan provisioning.
PhilRatings retained PSBank’s PRS Aaa (corp.) grade with a stable outlook, suggesting the rating will likely be maintained for the next 12 to 18 months.
PRS Aaa is the highest grade assigned by the domestic credit rating agency, which means a company has a “very strong capacity” to meet financial commitments compared with other corporations in the country.
“The ratings reflect PSBank’s strong market position, sound capitalization and prudent loan provisioning, strong parent and highly experienced management team,” PhilRatings said in a statement on Tuesday.
The rating took into account of the bank’s standing at the end of last year.
PhilRatings noted the lender maintained a healthy capitalization as its capital adequacy ratio rose to 24.3% as of end-December 2021 from 19.4% in 2020. This is also above the regulatory minimum.
Despite weaker asset quality due to a rise in bad loans, PhilRatings said PSBank responded by beefing up provisioning for potential losses.
“As gross nonperforming loans (NPL) ratio grew to 6.7% in 2020 from 3.6% in 2019, PSBank was proactive in its provisioning given the potential credit risks brought by the pandemic,” the ratings agency said.
It added that the thrift bank will benefit from the large asset base and capital of its parent Metropolitan Bank & Trust Co. (Metrobank). Metrobank had an 88.4% equity stake in the thrift lender as of end-2021.
“The management team [of PSBank], led by Jose Vicente L. Alde as president, is considered as highly experienced banking professionals. Mr. Alde’s solid background in information technology is seen as significant given the banking industry’s strong push for digitalization in response to the pandemic,” PhilRatings said.
PSBank’s net profit increased by 21% year on year to P1.5 billion in 2021. This was supported by higher fee income and lower loan loss provisions.
Its shares went down by 40 centavos or 0.72% to close at P55.10 apiece on Tuesday. — L.W.T. Noble
