MANILA, Philippines - Fitch ratings affirmed the “AA-” national long-term rating of China Banking Corp. (China Bank). The rating outlook is “stable.” The bank’s long-term foreign currency Issuer Default Rating of “BB” and its individual rating of “C/D,” citing good earnings and balance-sheet strength.
This maintains China Bank’s standing as one of the best-rated banks in the country. Fitch also notes that China Bank has a record of higher profitability than the industry average, owing to good costs control, a better diversified revenue base and, low provisioning costs.
Return on assets (ROA) of 1.9 percent in the first half of 2010 was well above the peer average of 1.3 percent. Non-performing loans (NPL) ratio fell to 6.2 percent at end-March 2010 from 7.5 percent at end-2008.
China Bank has proactively built reserves, covering 128 percent of NPLs at end-March 2010 and 23 percent of foreclosed properties at end-2009. Its core Tier 1 capital adequacy ratio (CAR) stood at 13.6 percent at end-June 2010.