AUB gets second-highest rating

ASIA UNITED Bank Corp. (AUB) was awarded the second-highest credit rating by a local debt watcher due to its continuous profitability and strong management support.

The listed bank received a PRS Aa plus (corp.) credit rating with a stable outlook from Philippine Rating Services Corp. (PhilRatings), based on a statement by the latter over the weekend.

The PRS Aa rating means AUB only differs “to a small degree” versus those rated the top “PRS Aaa” rating, and the “plus” means it is further qualified. Having a stable outlook also means its credit rating may likely hold for the next 12 months.

“The issuer rating takes into account AUB’s: a) highly-experienced management; b) competitive strategy, which is in line with its growth targets; c) its robust profitability, backed by sound management of expenses and continuous growth in interest income; and d) satisfactory funding profile,” PhilRatings said.

It added it also considered the favorable outlook of the banking industry despite the generally slower growth of the domestic economy.

PhilRatings said the bank’s chairman and chief executive officer, Abraham T. Co, has multiple years of experience in the banking and finance sector, making him a trustworthy leader of the company. AUB President Manuel A. Gomez was also noted for his two decades worth of experience in the industry.

AUB’s balance sheet was commended by the debt watcher, saying the bank’s deposits accounted for 92.6% of its total liabilities last year. The share of current and savings accounts (CASA) to total deposits also ended at 75% in 2018.

“Forecast shows that CASA will continue to comprise bulk of the bank’s deposits, going forward,” it said.

The bank’s financial results in the first half of the year was also accounted for by PhilRatings. It said the 63.3% rise in its net income to P2.6 billion in the six months to June reflects the company’s continuous profitability. It also recorded a 25.1% increase in net interest income to P4.5 billion and 68.4% jump in other operating income to P1.5 billion during the same period.

“Over the projected period, AUB is well-positioned to sustain its performance as interest income will remain the primary growth driver, as the bank intensifies its commercial and consumer lending activities,” the debt watcher said.

“AUB will continue to anchor its competitive strategy on its modern technology platform, expanding branch network, and highly-experienced management team,” it added. — Denise A. Valdez