Moody's affirms Philippine National Bank

Moody's Investors Service said it affirmed Philippine National Bank's Ba2/Ba3 local currency long-term deposit/subordinated debt ratings and constrained B1/B1 foreign currency senior debt/long-term deposit ratings with negative outlooks.

The bank's Not-Prime short-term deposit ratings remain unaffected with a stable outlook.

Moody's also affirmed Philippine National Bank's E bank financial strength rating with a stable outlook.

Moody's said the actions follow a recent announcement of Lucio Tan's successful bid for the government's stake in Philippine National Bank. The deal enlarges the Filipino tycoon's equity interest in the bank to 78.5% from 45%.

The affirmation of Philippine National Bank's bank financial strength rating recognizes its professional management, its improving but still weak financial fundamentals, as well as the challenges it might face in an environment that could see further volatility and consolidation. Moreover, while commercially minded, the bank's controlling shareholder's diversified business interests could result in concentrations in the credit portfolio.

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