Moody affirms Rizal Commercial Banking Corp’s rating
Moody’s Investors Service has affirmed Rizal Commercial Banking Corp’s (RCBC) E+ bank financial strength rating as well as its Ba3 senior unsecured debt, B3 preferred stock and B1/NP long-term short-term deposit ratings. The outlook for all ratings is stable.
The rating action was in response to management’s intention to issue additional common shares via a follow-on offering. The share issuance will increase the bank’s regulatory total capital adequacy ratio by approximately 200 bps. Although the resulting capital infusion would improve both RCBC’s regulatory and economic capital, the bank would still have to reduce its high level of reported non-performing assets and related party transactions to warrant a ratings change. RCBC had reduced its net non-performing assets to 13% of the bank’s total loans from 18% as at end 2005. RCBC’s E+ rating reflects the need to further improve its weak asset quality. The bank’s Ba3 senior debt and B1/Not Prime long-term/short-term deposit ratings essentially reflect its standalone financial fundamentals, but recognizes that some support from the regulator or from its shareholder could be available if needed. Founded in 1960, Rizal Commercial Banking Corp is the Philippines’ eighth largest indigenous bank. The bank had consolidated total assets of P223.7 billion (USD3.3 billion) as at December 31, 2006. –www.theasianbanker.com (March 30 2007)–