Global debt watcher Moody’s Ratings affirmed the investment-grade ratings of Ty-led Metropolitan Bank & Trust Co. (Metrobank), citing the bank’s strong capitalization, solid asset quality, and ample liquidity despite risks from elevated inflation, slowing economic growth, and heavier reliance on short-term market funding.

In a statement on Thursday night, May 21, Moody’s said it affirmed Metrobank’s Baa2/P-2 long- and short-term local- and foreign-currency deposit ratings, alongside its Baa2 foreign-currency senior unsecured rating and other counterparty risk assessments. The credit rating agency also maintained a stable outlook on the bank’s long-term ratings.

“The affirmation of Metrobank’s Baa2 ratings and baa2 BCA reflects the bank’s strong solvency and ample liquidity, balancing the risks from elevated reliance on short-term market funding,” Moody’s said.

Moody’s noted that Metrobank’s ratings do not receive any uplift from potential government support because the bank’s standalone credit profile is already at the same level as the Philippine sovereign rating of Baa2 with a stable outlook.

The debt watcher said Metrobank continues to exhibit strong asset quality due to conservative risk management and underwriting standards. As of end-2025, the bank’s problem loan ratio stood at 1.8 percent, lower than the 3.7-percent average among domestic rated peers, although slightly higher than the 1.7 percent recorded a year ago.

“As of March 2026, the bank’s reported nonperforming loans (NPLs) ratio was at 1.75 percent,” Moody’s added.

However, Moody’s warned that Metrobank may face some pressure on asset quality over the next 12 to 18 months due to the seasoning of retail loans and the impact of elevated inflation on borrowers. The bank also remains exposed to risks from borrower concentration.

Moody’s identified Metrobank’s capitalization as a major credit strength, with the bank reporting a tangible common equity-to-risk-weighted assets ratio of 17.5 percent and a common equity tier 1 (CET1) ratio of 16.1 percent as of end-2025.

Still, the bank’s CET1 ratio moderated to 14.2 percent in the first quarter of 2026 following dividend payouts and unrealized losses from investments marked through other comprehensive income.

Moody’s said Metrobank’s profitability remained broadly stable, with annualized return on tangible assets holding at 1.4 percent in the first quarter despite higher credit costs offsetting gains from lower funding costs.

Over the next 12 to 18 months, Moody’s expects Metrobank’s margins to come under pressure amid moderating loan growth and inflation-driven economic strains.

Moody’s also flagged Metrobank’s funding structure as a relative weakness due to increased dependence on less-stable funding sources such as repurchase agreements and interbank borrowings.

As of December last year, less-stable funds accounted for 32 percent of tangible banking assets, up from 25 percent a year ago. Nonetheless, Moody’s said the bank benefits from a large and diversified deposit base that helps reduce deposit runoff risk and support funding stability.

Metrobank’s liquidity also remained ample, with core banking liquidity at 25 percent as of end-2025 and a liquidity coverage ratio of 151 percent as of March this year.

Moody’s said an upgrade of Metrobank’s ratings is unlikely because they are already aligned with the Philippines’ sovereign rating. However, the credit rating agency warned that the bank’s credit profile could face downward pressure if reliance on less-stable funding rises further or if capitalization materially weakens.

Metrobank, one of the country’s largest lenders, reported total assets of ₱3.764 trillion as of end-March.