Fitch Ratings revised on Tuesday the outlook on the long-term issuer default rating of the country’s six biggest domestic banks to negative from stable following a similar downward revision in the outlook of the Philippines on July 12 on the back of the slower economic recovery from the COVID-19 pandemic.
“The less vigorous economic recovery is likely to weigh on loan demand and business opportunities over the next 12 to 18 months,” Fitch said in a report.
But just like the sovereign (BBB), Fitch also affirmed the current ratings of BDO Unibank Inc. (BBB-), Metropolitan Bank & Trust Co. (BBB-), Bank of the Philippine Islands (BBB-), Land Bank of the Philippines (BBB), Philippine National Bank (BB) and Development Bank of the Philippines (BBB).
Fitch said the viability rating of BDO, the country’s biggest bank controlled by the Sy family, was underpinned by its steady management track record, acceptable loss absorption buffers and market-leading franchise, which support its funding profile and business generation over the years.