PSBank nets P2.9 B in first half of 2013

MANILA—Philippine Savings Bank chalked up a net profit of P2.9 billion in the first half of 2013, more than double the profit posted a year ago, on higher interest earnings and trading gains early in the year.

The thrift banking arm of the Metrobank group attributed the sharp increase in net profit compared to P1.4 billion in the same period last year to the expansion of its loan portfolio and gains from its investment portfolio. Its first-half performance has already topped its P2.3 billion net income for the entire 2012.

As the bank earlier announced a net profit of P2 billion for the first three months – a quarterly record high – this suggested that the bulk of the profit had come in the first quarter. PSBank booked trading gains amounting to P3 billion in the first quarter from only P1.7 billion in the same period last year.

But for the first semester, core businesses likewise expanded, with net interest income rising by 13 percent year-on-year to P3.2 billion. The bank said interest income from loans rose by 16 percent primarily due to the expansion of its lending activities.

PSBank’s gross loan book went up by 21 percent to P81 billion as record-low interest rates and improving consumer sentiments continued to drive loan demand.

“We are experiencing strong demand for both auto and mortgage loans. New loan releases surged by 45 percent from last year. If this pace holds up in the second half, our loan portfolio may be 22-24 percent higher than previous year,” PSBank president Vicente Cuna said in a press statement.

The bank reported that asset quality remained good despite an increase in lending activities. Net non-performing loan (NPL) ratio to total loans stood at 0.3 percent. The bank also set aside additional loan provisions amounting to P1.1 billion during the period, thereby increasing NPL coverage to 107 percent.

The bank also reported that declining interest rates in the second quarter allowed it to recognize opportunities from its investments in government securities. PSBank also posted a 16 percent growth in its income from service charges and commissions.

The bank boosted capital by 22 percent year-on-year to P17.4 billion at end-June. This translated to higher capital adequacy ratio of 18.8 percent or well above the 10 percent minimum required level for local banks.

PSBank’s distribution network now includes 222 branches and 536 onsite and offsite ATMs all over the country.