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Business

Morgan Stanley upgrades RCBC rating

Lawrence Agcaoili - The Philippine Star
Morgan Stanley upgrades RCBC rating
Juan Gabriel Tomas IV, chief risk officer and risk management group head at RCBC, said the upgrade in its rating to ‘AA’ from ‘A’ in 2019 based on the recent MSCI environmental, social and governance ratings report attests to the bank’s continuing efforts to protect customers as well as the communities they operate in.
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MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) received a credit rating upgrade from Morgan Stanley Capital Inc. (MSCI) owing to its robust consumer protection programs as well as sound data privacy and security measures.

Juan Gabriel Tomas IV, chief risk officer and risk management group head at RCBC, said the upgrade in its rating to ‘AA’ from ‘A’ in 2019 based on the recent MSCI environmental, social and governance (ESG) ratings report attests to the bank’s continuing efforts to protect customers as well as the communities they operate in.

“We welcome the ESG rating upgrade from MSCI.  RCBC will continuously improve systems and processes to ensure the highest level of security and diligence to help mitigate risks posed on the financial assets of our clients,” Tomas said.

The upgrade placed the Yuchengco-led lender among the top 50 banks globally of the 192 reviewed under the MSCI rating system.

Training of employees in the proper handling of data to preempt risks and RCBC’s strong endeavors to attract and retain talent were also the reasons behind the rating upgrade.

The six key areas used for the ESG metric incude financing environmental impact, governance, access to finance, privacy and data security, human capital development and consumer financial protection.

The ratings report also provided a peer comparison of RCBC against five global banks:  China Construction Bank Corp., JP Morgan Chase & Co., China Merchants Bank Co. Ltd., Bank of America Corp., and Industrial and Commercial Bank of China Limited.

RCBC has the highest ESG rating of AA in this peer benchmarking.

The MCSI publishes research and assessments on companies on a ‘AAA’ to ‘CCC’ scale depending on the exposure to industry-specific ESG risks and their ability to manage those risks relative to competitors.

Latest data showed RCBC financed P56 billion worth of green and social projects.

RCBC said its sustainable lending portfolio accounted for 10 percent of its total loan book as of end September last year.

The listed bank issued its own Sustainable Finance Framework in April 2019 paving the way for the issuance of two-year first ASEAN-labeled peso-denominated bonds worth P8 billion in June and the five-year $300 million bond in September of the same year.

This was on top of the first green bond from the Philippines under the ASEAN Green Bond Standards worth P15 billion in February 2019.

Under RCBC’s Environmental and Social Management System, all bank loans undergo a vetting process that takes into account the social and environmental impact a project may have on the environment and communities.

It continues to embed sustainable finance in its lending strategy and operations by casting a wider net as the financing instruments provided an opportunity for investors in the impact-investing space and embrace global best practices by engaging ING Bank and Sustainalytics in designing its framework.

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