PSBank posts record net profit of P2B in Q1

MANILA, Philippines–Philippine Savings Bank, the thrift bank arm of the Metrobank group, generated a record-high net profit of P2 billion in the first quarter as hefty trading gains complemented core interest earnings.

The first quarter net profit was 273-percent higher than the level in the same period last year, the bank disclosed to the Philippine Stock Exchange on Monday.

PSBank grew its net interest income by 8.7 percent to P1.5 billion. Interest earnings from loans went up by 16 percent to P1.9 billion as the bank expanded its loan book by 23 percent to P77 billion. Strong consumer confidence and sustained economic growth continued to buoy demand for loans, the bank reported.

Auto lending rose by 28 percent compared to the previous year while mortgage lending expanded by 21 percent. The bank’s combined small and medium enterprise as well as large corporate loans likewise went up by 25 percent.

Meanwhile, the low-interest rate environment allowed PSbank to post large trading gains from its investments in government securities. Trading gains amounted to P3 billion from only P1.7 billion in the same period last year.

The bank also grew income from service charges and commissions by 13 percent year-on-year.

On the other hand, improvements in operating efficiency brought by automation kept operating expenses flat at P1.8 billion, the bank said.

“We are seeing traction in our strategy of improving sales coverage and operating efficiency as evidenced by the continued increase in market share for our key loan products, auto and mortgage. Given this loan increase, we are confident to exceed the original income target of the bank for the year,” said PSBank executive vice president Jose Vicente Alde.

While the bank boosted its earning assets, it kept good quality of earnings assets in its books. The ratio of net non-performing loans stood at only 0.4 percent. PSBank has also set aside P609 million as provisions for the first quarter, thus increasing loan coverage to 102 percent.

PSBank’s equity rose by 27 percent to P18.7 billion. This translated to a higher capital adequacy ratio to risk assets of 18.6 percent, well above the 10-percent minimum required level for local banks.

The bank’s distribution network includes 222 branches and 537 onsite and offsite ATMs all over the country.