ASIA United Bank Corp. said on Tuesday it has secured an “Aaa” credit rating from Philippine Rating Services Corp. (PhilRatings) for its highly experienced management and satisfactory funding profile, among others.
In a disclosure to the Philippine Stock Exchange (PSE), AUB said PhilRatings also based its ratings on expectations that the bank’s profitability will remain stable supported by growing interest income and sound management of expenses; its competitive strategy which is supportive of its growth targets; and expectations that the banking industry will continue to benefit from the positive outlook of the domestic economy.
The assigned rating is a notch higher from the bank’s previous issuer rating of PRS Aa (corp.).
A firm rated PRS Aaa differs from the highest rated corporates only to a small degree, and has strong capacity to meet its financial commitments relative to that of other Philippine corporate, according to Philratings. The ratings agency can also include a plus (+) or a minus (-) sign to further qualify the rating.
AUB is considered a mid-size player in the Philippines in the universal and commercial banking sector, with assets of P165.5 billion as of end-2016.
The bank’s ranking among all universal and commercial banks, based on Bangko Sentral ng Pilipinas (BSP) data as of December 2016, is as follows: assets, 15th; deposits, 15th; total loans, 13th and capital accounts, 12th.
For 2016, AUB’s total deposits increased by 4.7 percent to P135.8 billion on the back of more intensified deposit-generation campaigns for branch banking and other business segments.
“Deposit growth will be supported by the addition of new branches, with CASA [current accounts/savings accounts]continuing as AUB’s primary funding source, going forward,” the company said.
For this year, AUB said its funding profile was more than satisfactory as of the first three months, with deposits accounting for 91.4 percent of total liabilities.
Net interest income in the first quarter grew 16.1 percent to P1.5 billion due to a decline in interest expense, largely as a result the increase in low-cost deposit volume. The company noted that net interest income accounted for a high 81.4 percent of revenues in the period.
Management of expenses remained largely under control. Expenses (excluding provisions) to average assets ratio was 2.4 percent, which is within historical levels and year-on-year expense growth was a minimal 3.2 percent, to P1 billion.
“AUB will continue to anchor its competitive strategy on its modern technology platform, expanding branch network and highly-experienced management,” it said.
“These initiatives are seen to support AUB’s goal of continued double-digit growths for its balance sheet and profitability, going forward,” it added.