Metrobank receives 'C/D' credit rating

Metropolitan Bank & Trust Co. (Metrobank) obtained on Friday Fitch Rating's upgraded rating of "C/D" from "D." A rating of "C" means that Metrobank is an adequate bank with one or more troublesome aspects. A "D" rating, on the other hand, means that the bank has weaknesses of internal and/or external origin, Fitch said in its report. "The upgrade of Metrobank's individual rating reflects its stronger capital position, particularly after raising new common equity in 2010 and its reasonably good performance [amid] the recent downturn in 2008 and 2009," Fitch said in a report. The credit watcher said Metrobank's raising of its capital has enhanced the bank's loss absorption capacity and helped alleviate potential weaknesses that could arise from its balance sheet. "Positively, such pressures on asset quality and capital have gradually eased in view of the more stable credit environment, which is likely to continue amid the ongoing economic recovery in the Philippines," Fitch pointed out. With a higher capital buffer and reduced or better-reserved non-performing assets, Metrobank had a strong domestic presence and its balance sheet improved in recent years, Fitch said. "Although loan quality held up fairly well, non-loan assets contributed most of the bank's impairment charges in 2009, equalling to a high 1.1 percent of total assets," the report said. However, the reserve coverage on its investment properties — mostly foreclosed assets — remained lower at 9 percent than that of non-performing loans at 76 percent. Fitch also noted Metrobank's improved capital position. "Hence, the bank is better-placed to cushion any potential impairment risks in a worst case scenario," it said. —JE/VVP, GMANews.TV