MANILA – Fitch Ratings has affirmed Rizal Commercial Banking Corp.'s "BB-" Long-Term Foreign- and Local-Currency Issuer Default Ratings with Stable Outlook and 'bb' Viability Rating, a government press release said.

The agency has simultaneously downgraded the Support Rating to "4" from "3" and revised the Support Rating Floor to "B+" from "BB-".

The IDR continues to be driven by the Viability Rating, reflecting RCBC's loan concentration and large, albeit decreasing legacy non-performing assets.

It also takes into account the bank's improved capitalization, liquid balance sheet, satisfactory earnings profile and reserves.

The Stable Outlook factors in the reduced balance-sheet risk but also the potential knock-on impact from mounting global headwinds.

The Support Rating and Support Rating Floor reflect Fitch's reassessment of the degree of extraordinary state support for RCBC relative to other medium-sized Philippine banks, which may be more limited than for bigger and more systemically important banks.

This does not reflect on the bank's performance, which has seen moderate improvement in recent years.

Renewed concerns on asset quality, possibly due to aggressive growth or further concentrations of assets, and concurrent weakening in loss-absorption capacity may be rating negatives.

A significant driver behind RCBC's high profitability over 2009-2112 has been trading gains, which can be volatile through interest rate cycles.

Fitch believes the benefits of a more sustainable earnings profile from loan- and fee-based businesses may occur only over the long term, in light of the need to control costs and asset quality while expanding.

The "B-" hybrid issue rating is three notches below the Viability Rating on account of their subordinated status and going-concern loss-absorption features.*PNA

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