Philippine Business Bank (PBB) grew its core income by a third in the first six months of the year, boosted by robust lending to small and medium entrepreneurs.
In a disclosure to the Philippine Stock Exchange (PSE) last Friday, PBB said that its first half core income—comprised of fee-based and net interest income—rose by 34 percent to P1.134 billion from P847 million in the same period of last year.
The banking arm of Alfredo Yao’s group cited the small and medium enterprise (SME) segment of its loan portfolio, which “remained strong” during the six-month period, bolstering the first half net interest income to P1.072 billion—up 42 percent from P754 million seen last year.
The net interest income during the second quarter alone reached P551 million—6 percent higher than the P520 million made in the first three months of the year.
PBB’s first half net earnings, however, dropped by 68 percent to P258 million, in part because the bank incurred higher costs and expenses for its “aggressive” branch network expansion.
To date, PBB has 108 branches across the country, with plans to open 18 more before the year ends.
“The bank’s network expansion program will continue until such time that the presence of Philippine Business Bank is felt throughout the key cities, municipalities and business centers throughout the country. We remain committed to our goal of strengthening our reputation as the bank of choice for the SME market,” the bank’s president and chief executive Rolando R. Avante said in a statement.
According to Avante, PBB’s network expansion “will serve as the backbone of the sustained growth in our deposit-taking and lending business, and will continue to be a key driver of our profitability in the coming years.”
On a quarterly basis, net earnings jumped by 29 percent to P145 million in the second quarter from the P113 million seen the previous quarter.
Also, PBB said its treasury earnings thus far were dampened by the “volatility in the capital markets, coupled with expectations of a rate hike.” Ben O. de Vera