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Banks (Finance)

Moody's Affirms Credit Ratings of Three Philippine Banks Despite Soaring Consumer Loan Growth

Strategic Insights

— 2 min read

Moody's ratings agency has reaffirmed the credit ratings of three major Philippine banks: BDO Unibank Inc., Metropolitan Bank and Trust Company, and Bank of the Philippine Islands, citing stable asset quality, strong solvency, and healthy liquidity. However, the banks are unlikely to receive credit rating upgrades due to the country's sovereign ratings. Moody's noted that BDO's high consumer loan growth over the past three years was offset by its strong credit underwriting and robust funding and liquidity. Metrobank's rating was affirmed due to its strong solvency, but its weakened funding and liquidity metrics were a concern. BPI's rating was also reaffirmed, but its deteriorating asset quality, driven by rapid loan growth into higher-risk consumer segments, was a factor.

Key Takeaways:

  • Moody's has affirmed the credit ratings of BDO Unibank Inc. (BDO), Metropolitan Bank and Trust Company (Metrobank), and Bank of the Philippine Islands (BPI) despite soaring consumer loan growth.
  • The banks' ratings were stable due to their strong solvency, healthy liquidity, and robust funding.
  • BDO's rating reflected its stable asset quality and credit underwriting, but high consumer loan growth over the past three years was a concern.
  • Metrobank's rating was affirmed due to its strong solvency, but weakened funding and liquidity metrics were a concern.
  • BPI's rating was reaffirmed, but its deteriorating asset quality, driven by rapid loan growth into higher-risk consumer segments, was a factor.
  • Moody's assumed that Metrobank would receive support from the Government of the Philippines in times of need, but its BCA was already at the same level as the sovereign rating.
  • BDO's rating could be downgraded if its capital declines or tangible common equity as a percentage of Moody's-adjusted risk-weighted assets (TCE/RWA) gets close to 11.5 percent.
  • A credit rating downgrade is also possible for BDO if there is a significant and sustained increase in non-performing loans (NPLs) which could increase to over 100 basis points.
  • Metrobank's rating could be downgraded if its usage of market funds increases to 25 percent of tangible banking assets or if unencumbered liquid resources as a percentage of tangible banking assets declines to 20 percent.
  • BPI's rating could be downgraded if its solvency metrics see a significant deterioration or bad loans ratio increases above five percent.

Statistics:

  • BDO reported total assets of P4.9 trillion as of 31 March 2025.
  • Metrobank reported total assets of P3.475 trillion as of 31 March 2025.
  • BPI reported total assets of P3.3 trillion as of 31 March 2025.
  • Moody's-adjusted TCE/RWA ratio for BDO was 13.3 percent as of 31 March 2025.
  • Moody's-adjusted TCE/RWA ratio for Metrobank was 13.8 percent as of 31 March 2025.
  • Moody's-adjusted TCE/RWA ratio for BPI was 12.6 percent as of 31 March 2025.

Sources:

  • Moody's Ratings (2023) - "Credit Rating Report on BDO Unibank Inc." [Source: Moody's website]
  • Moody's Ratings (2023) - "Credit Rating Report on Metropolitan Bank and Trust Company" [Source: Moody's website]
  • Moody's Ratings (2023) - "Credit Rating Report on Bank of the Philippine Islands" [Source: Moody's website]
  • BDO Unibank Inc. (2025) - "Annual Report" [Source: BDO website]
  • Metropolitan Bank and Trust Company (2025) - "Annual Report" [Source: Metrobank website]
  • Bank of the Philippine Islands (2025) - "Annual Report" [Source: BPI website]

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