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Banks (Finance)

Moody's Affirms Bank of the Philippine Islands' Baa2/P-2 Long-Term and Short-Term Deposit Ratings

Strategic Insights

— 1 min read

The rating affirmation reflects Bank of the Philippine Islands' (BPI) adequate capital, healthy liquidity, and good profitability, which are balanced against the bank's deteriorating asset quality, driven by rapid loan growth into higher-risk consumer segments.

Key Takeaways:

  • BPI's Baa2 long-term deposit ratings, senior unsecured ratings, and baa2 Baseline Credit Assessment (BCA) were affirmed, reflecting the bank's adequate capital, healthy liquidity, and good profitability.
  • The bank's problem loan ratio was stable at 3.1% as of end-2024, but its reported nonperforming loan (NPL) ratio increased to 2.1% from 1.8% over the same period, driven by higher problem loans in unsecured lending segments.
  • BPI's return on assets improved to 1.91% in 2024, from 1.75% the year before, but is expected to weaken to around 1.6%-1.7% in 2025 as modest NIM expansion is offset by higher credit costs.
  • The bank's Common Equity Tier 1 (CET1) ratio declined to 13.9% as of end-2024, but improved to 14.7% as of March 2025, remaining lower than pre-2023 levels.
  • BPI's funding and liquidity will remain robust, with a low reliance on market funds and liquid banking assets accounting for 27% of tangible banking assets as of end-2024.
  • Moody's-adjusted tangible common equity/risk-weighted assets ratio decreased to 14.3% as of end-2024, but is expected to remain stable.
  • Bank of the Philippine Islands (BPI) is headquartered in Manila, Philippines, and reported total assets of PHP3.3 trillion as of 31 March 2025.

Statistics:

  • Problem loan ratio: 3.1% as of end-2024 (stable)
  • Nonperforming loan (NPL) ratio: 2.1% as of end-2024 (increased from 1.8% over the same period)
  • Return on assets: 1.91% in 2024 (improved from 1.75% the year before)
  • Common Equity Tier 1 (CET1) ratio: 13.9% as of end-2024 (declined from 15.3% over the same period)
  • Tangible banking assets: PHP3.3 trillion as of 31 March 2025
  • Liquid banking assets: 27% of tangible banking assets as of end-2024

Sources:

  • Moody's Ratings (Moody's) news release
  • Bank of the Philippine Islands (BPI) annual report
  • https://ratings.moodys.com/rmc-documents/432741 (Rating Methodology published in November 2024)
  • https://ratings.moodys.com (Rating Methodologies page)

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