Fitch Ratings has revised the Outlook on
At the same time, Fitch has affirmed the bank's Government Support Rating (GSR) at 'bbb-'.
This rating action follows a similar revision in the Outlook on
The bank's Viability Rating (VR) was not part of this review, as we believe there have been no significant developments in its financial performance since we last reviewed the VR on
Key Rating Drivers
Sovereign Changes Drive Outlook Revision: BPI's Long-Term IDRs are driven by Fitch's expectation of a high likelihood of sovereign support to the bank in times of need. This is also reflected in its GSR of 'bbb-', which is a one notch lower than the 'BBB' sovereign rating. Our view takes into consideration BPI's high systemic importance as one of the top three largest privately-owned banks in
The Short-Term IDR has also been affirmed at 'F3', in line with the affirmation of the Long-Term IDRs.
VR Unaffected: The bank's VR is not affected by this development and we believe it will continue to benefit from the resilient economic momentum in the next 12-18 months. We project the bank's profitability to continue improving, on account of higher margins and sustained loan growth.
For more details on the key rating drivers and sensitivities of the bank's VR, see 'Fitch Affirms Bank of the Philippine Islands at 'BBB-'; Outlook Negative', published on
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A revision in the sovereign rating Outlook or a downgrade of the sovereign rating is likely to lead to a similar revision in the bank's Outlook and/or IDRs.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
A revision in the sovereign rating Outlook or an upgrade of the sovereign rating is likely to lead to a similar revision in the bank's Outlook and/or IDRs, provided our assessment of the state's propensity to support BPI remains intact.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
BPI's IDRs are driven by sovereign support and are linked to
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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