BDO ratings affirmed

MANILA, Philippines - Fitch Ratings has affirmed the individual rating of Banco De Oro Unibank Inc. (BDO) at C/D. The rating indicates that the bank is stable enough to weather a weak economy, but a prolonged recession may hurt its profitability in the long term. But Fitch said that reduction in its capital cushion presents a downside risk.

BDO’s Tier 1 capital adequacy ratio (CAR) declined to 8.4 percent in the first half of 2009, compared with 10.7 percent posted in end-2007. BDO’s recent acquisition of GE Money Bank from GE Capital, the financial services arm of the US-based General Electric Co. (GE), can also raise the BDO’s Tier 1 CAR to nine percent at the end of this year.

Fitch said this would help in preserving BDO’s financial profile and rating and cushion it from a prolonged recession.