Moody's Affirms BDO Unibank's Ratings

Strategic Insights -

Moody's Investors Service has confirmed BDO Unibank, Inc.'s strong credit profile, citing its stable asset quality, robust funding and liquidity, and adequate capital. The bank's high consumer loan growth over the past three years has been offset by its robust underwriting and focus on consumer loan origination from its current depositor base.

Key Takeaways:

  • BDO Unibank's long-term (LT) and short-term (ST) foreign currency (FC) and local currency (LC) deposit ratings were affirmed at Baa2/P-2, respectively.
  • The bank's Baa1/P-2 LT and ST FC and LC Counterparty Risk Ratings, Baa1 (cr)/P-2 (cr) LT and ST Counterparty Risk Assessments, and baa2 Baseline Credit Assessment (BCA) and baa2 Adjusted BCA were also confirmed.
  • The bank's FC senior unsecured medium-term note program rating and senior unsecured rating were affirmed at (P)Baa2 and Baa2, respectively, and its FC other short-term rating at (P)P-2.
  • BDO Unibank's asset quality has remained stable over 2022-2024, with a 3-year CAGR of 14.5% in consumer loan growth.
  • The bank's problem loan ratio, measured by stage 3 loans as a percentage of gross loans, remained unchanged at 1.9% as of end-2024.
  • BDO Unibank's problem loan coverage ratio is one of the strongest among its domestic rated-peers, at 148% as of end-2024.
  • The bank's profitability, measured by return on assets, improved to 1.77% in 2024 from 1.69% the previous year, driven by a stable net interest margin, higher non-interest income, and lower credit costs.

Statistics:

  • Total assets: PHP4.9 trillion as of 31 March 2025.
  • Consumer loan growth: 14.5% CAGR over 2022-2024.
  • Problem loan ratio: 1.9% as of end-2024.
  • Problem loan coverage ratio: 148% as of end-2024.
  • Return on assets: 1.77% in 2024.

Sources:

  • Moody's, "Moody's Ratings Affirmations BDO Unibank, Inc." (March 2025)
  • https://ratings.moodys.com/rmc-documents/432741 (Banks published in November 2024)