Moodys affirms BDO and BPIs ratings, outlooks - BusinessWorld Online

REUTERS MOODY’S RATINGS has affirmed its long- and short-term ratings and outlooks for BDO Unibank, Inc.and Bank of the Philippine Islands (BPI), citing their profitability and strong deposit bases.

The debt watcher affirmed the two banks’ “Baa2/P-2” long- and short-term foreign and local currency deposit ratings and “stable” outlooks, it said in separate statements late on Wednesday.Also affirmed were their counterparty risk ratings and assessments, baseline credit assessments, and the ratings for their respective medium-term note programs.

For BDO, Moody’s said the affirmed ratings reflect its strong asset quality, funding and liquidity, adding that it has ample buffers and good profitability.“The bank’s funding and liquidity will remain its key strengths, with a robust and dominant deposit franchise supporting its very high deposit market share, and hence access to lower cost of funding and high current and savings account deposit ratio of 68% as of end-2025.

Its less-stable funds ratio stood at an adequate 23.1% as of end-2025, while its core banking liquidity ratio was 20.6% as of the same date,” it said. It added that BDO’s nonperforming loan (NPL) ratio is likely to stay stable this year, still supported by write-offs on its fast-growing unsecured retail loans.Meanwhile, its credit costs may stay elevated amid the surge in the share of consumer loans in its portfolio over the past two years, and amid preemptive provisioning as macroeconomic conditions become more challenging.

“The bank’s high concentration to large corporate loans and long-dated investment securities will also pose risks to its asset quality.” The credit rater sees BDO’s return on assets (RoA) to range from 1.4% to 1.5% this year as net interest margin (NIM) stabilizes, even while credit costs and operating expenses remain elevated.Meanwhile, capitalization will stay adequate, although capital generation may gro...