Allied Bank gets ratings upgrade

Credit rating agency Capital Intelligence Ltd. has upgraded Allied Banking Corp.’s financial strength rating from “BB-” to “BB“, while affirming its foreign currency long and short-term ratings to “BB-“ and “B”, respectively.

The outlook for its foreign currency and financial strength are “stable.”

Supporting the ratings upgrade are Allied Bank’s significant improvement in asset quality, good niche in inward remittance market from overseas Filipino workers, bancassurance supported by the acquisition of New York Life Insurance (Philippines) and the growing deposit-base, mostly low-cost deposits.

Allied Bank president Reynaldo A. Maclang said that the bank has been reducing its non-performing loans (NPLs) through collections and recoveries, and continuously disposing of its foreclosed assets through auctions and retail sales.

The loan mix is being adjusted through expansion in the retail and consumer loans. The growth in low-cost CASA deposits provides support for net interest margin. Its non-interest income has been supported by its remittance business and bancassurance income.

Moreover, the bank’s recent issuance of lower Tier 2 subordinated notes was 70 percent oversubscribed the original issue size. The issuance of the notes strengthened Allied Bank’s capital base and improved its capital adequacy ratio (CAR) from 16.9 percent as of end of last year to 20.09 percent.

Allied Bank is one of the largest universal banks with a branch and ATM network nationwide of 283 and 247, respectively. — TPT