PSBank projecting double-digit profit growth
Metrobank’s thrift bank arm Philippine Savings Bank expects to grow at a faster pace next year, with net profit seen growing by double-digit level.
“This year was tough but next year, there will be better spreads and hopefully, momentum will continue,” PSBank president Vicente Cuna Jr. said.
In the last five years, loans have been growing at a double-digit pace and the trend is seen to continue next year, he said.
Challenges
Internally, PSBank is targeting to grow its profit by double-digit level compared to the single-digit pace seen this year.
In the first nine months, PSBank posted a 7.7-percent growth in profit to P1.9 billion.
Stiff competition is seen as among the key challenges next year, Cuna said. Keeping credit quality in check is another.
When the financial system is awash in cash and competition is extremely tough, some banks tend to become too aggressive that could trigger an increase in loan delinquencies. For PSBank, Cuna said the goal would be to maintain good asset quality.
Growth
Asked about the impact of an uptick in interest rates, Cuna said while this would be bad for the trading business, it would be good for core lending. As such, he said the overall impact would be balanced.
In the fourth quarter, Cuna said trading gains were not as abundant as the earlier part of the year. Interest rates have spiked following the US election and the election of Republican Donald Trump as president.
In the first nine months, PSBank’s core income—composed of revenues from consumer loans and investments—saw a double-digit growth of 10.7 percent year-on-year. Consumer loan portfolio rose by 14.7 percent year-on-year to P113.7 billion, propelled by auto and mortgage businesses.
While growing its risk assets, the bank kept nonperforming loans in check at a ratio of 1.1 percent of total loans, with NPL coverage at 85 percent.
By the end of September, PSBank’s total resources stood at P183.8 billion, expanding by 15.3 percent year-on-year. It had 255 branches and 611 automated teller machines nationwide. —DORIS DUMLAO-ABADILLA
