PNB to dump P10B in bad assets

Philippine National Bank plans to reduce its stock of foreclosed assets this year by half, unloading through a series of asset pool transactions about P10 billion worth of real and other properties acquired (Ropa).

In a briefing Tuesday after the bank’s annual stockholders’ meeting, newly appointed PNB president Reynaldo Maclang also announced plans for PNB to take full control of China-based subsidiary Allied Commercial Bank (ACB) to be able to pursue expansion plans on the mainland.

ACB, which is based in Xiamen but has a branch in Chongqing, plans to expand in China, but may only do so under local laws if it is 100-percent owned by PNB, Maclang said.

PNB has already submitted a request to the Bangko Sentral ng Pilipinas to approve the increase in ownership to 100 percent from the existing 91 percent, he added.

PNB may shell out an estimated P600 billion to buy out minority interest in Allied Commercial Bank.

According to Maclang, the bank is bullish on China, but it still exercises caution since it is not among the big players on the mainland.

Nevertheless, he said, PNB is looking at opportunities to make its presence felt in China.

China’s economy may be slowing down, “but it’s still strong,” said Horacio Cebrero III, PNB executive vice president. “We have to be present in China.”

Meanwhile, part of PNB’s strategy to strengthen its balance sheet is to take a more aggressive move to unload ROPAs.

The PNB used to pare down its stock of bad assets by an average of 12 percent. This time, however, the bank has decided to fast-track the process using an asset pooling scheme.

“We classified assets geographically, and then put in pieces of Metro Manila and added assets that will attract investors,” said Emmanuel Plan, head of PNB’s strategic asset management team.

The bank will reduce its Ropa by 50 percent from the current level of P20 billion, which included P5 billion in additional assets brought on by the merger with Allied Bank.

The bank is now bidding out the first bucket of assets worth P3.2 billion, consisting of over 200 pieces of property that are big and small, Plan said.

He added that this bucket included “very good” properties mixed with “problematic” ones.

“This is the first time we’re coming out with an asset pool sale. If we’re successful, we’ll see a 50-percent reduction of ROPA towards the end of the year,” Plan said.