An issuer rating of PRS A means that the bank has an above average capacity to meet its financial commitments relative to that of other Philippine obligors.
"However, it is somewhat more susceptible to the advarse effects of changes in circumstances and economic conditions than higher-rated obligors," PhilRatings added.
An issue rating of PRS A, on the other hand, is defined as "with favorable investment attributes and are considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the futures."
The ratings agency considered the bank’s sound deposit base, satifactory business franchise, as well as strategies adopted by the bank to address asset quality issues.
In terms of asset quality, the bank’s non-performing asset (NPA) ratio continued to improve but as of end 2005 was still higher compared to the commercial bank sector’s average.
Asset quality concerns however are mitigated by the bank’s sound balance sheet structure and well-diversified loan book, as management continuously focuses its attention on programs to improve asset quality.
"The bank’s deposit to liabilities ratio as of end 2005 of 79.6 percent compares favorably with the peer average of 76 percent. The more stable current and savings deposits continue to comprise a significant portion of the bank’s deposit base. Continuous product innovation as well as aggressive deposit solicitation efforts have allowed BanCommerce to keep its 10-percent share of commercial bank sector deposits despite the non-addition of branches," it added.
Aside from various deposit products, BanCommerce offers a wide range of other commercial banking services through its network of 112 branches that are located across the Philippines. It is the country’s third largest commercial bank, with assets of P60 billion as of end 2005.
BanCommerce president and chief executive officer Raul B. de Mesa recently said it was confident of surpassing its 2006 net income target of P370 million. In fact, initial reports indicate that as of end October, it has already breached the P380-million level.
Total deposits ballooned to P52.6 billion end October, more than P10 billion from the P42 billion end 2005.
It has 112 branches and 68 automated teller machines (ATMs), one-third of which are offsite. – Ted Torres