PHILIPPINE BUSINESS Bank (PBB) saw its net income drop by 59.38% in the first quarter due to trading losses amid the volatile economic environment caused by the coronavirus pandemic.
The lender’s net income fell to P160.2 million in the first three months of the year from P394.4 million in the same period in 2020, PBB said in a filing on Tuesday.
The bank’s first-quarter profit translated into annualized return on equity and return on assets of 4.64% and 0.54%, respectively.
“The trading activities this year was affected by inflation concerns that pushed yields higher both for peso and dollar-denominated instruments,” PBB Vice Chairman, Chief Executive Officer and President Roland R. Avante was quoted as saying in the statement.
The bank’s net interest income slipped 2.9% to P1.365 billion from P1.405 billion a year ago due to lower interest earnings from loans and receivables and trading.
Meanwhile, its core income rose 4.55% to P725.2 million in the first quarter from P693.6 million, supported by lower non-interest expenses.
PBB’s loans and receivables inched up by 2.6% to P87.9 billion in the period from P85.641 billion the year prior. Its nonperforming loan ratio stood at 3.73% as of March, improving from the 4.07% recorded at end-2020.
It set aside P75 million in loan loss provisions in the first quarter.
Meanwhile, deposits with the bank stood at P99.892 billion, inching higher from the P90.104 billion seen a year earlier. PBB’s deposit portfolio’s current account, savings account deposits to time deposits ratio improved to 53:47 as of March from 47:53 a year ago.
On the other hand, the bank’s operating expenses dropped 13.5% to P750.6 million.
“As economic conditions stabilize in the next few quarters, the bank’s profit levels should show an improvement. PBB continues to push cost efficiency and productivity,” Mr. Avante noted.
PBB’s capital adequacy ratio improved to 14.33% as of March from 13.96% a year prior.
Its assets inched down to P119.16 billion at end-March from P119.8 billion as of December 2020. Equity also dropped to P13.77 billion from P13.88 billion in the same period.
Mr. Avante said the bank is eyeing to build up its equity capital so it has enough buffers against the uncertainties caused by the pandemic.
“The business environment continues to remain challenging given the effects of the pandemic. Nevertheless, PBB continues to strengthen its core business while managing its risk assets… In line with the bank’s growth aspirations, PBB will be looking to raise P2-3 billion in equity capital to fund general corporate requirements and expand risk assets. Raising capital today will position PBB to exploit market opportunities as the economic recovery unfolds and help cushion the bank from the uncertainty of the pandemic,” he said.
PBB’s shares closed unchanged at P9.60 apiece on Tuesday. — LWTN