PSBank’s Q1 profit down 5.1%
The Metrobank group’s thrift bank arm, Philippine Savings Bank (PSBank), saw a 5.1 percent year-on-year drop in first quarter net profit amounting to P646.2 million as it jacked up loan loss provisioning to prepare for fallout from the coronavirus (COVID-19) pandemic.
“PSBank has a strong balance sheet and capital position coming into this unprecedented situation. Cognizant of the potential impact of the pandemic to the economy, we decided to exercise prudence by increasing provisions to 150 percent versus previous year,” PSBank president Jose Vicente Alde said in a disclosure to the Philippine Stock Exchange.
About P1.29 billion in additional loan loss buffer was set aside in the first quarter compared to P514.86 million in the same period last year.
The bank’s net interest income rose by 21.8 percent year-on-year to P3.2 billion versus the same period last year.
Loan booking increased by 3.6 percent year-on-year to P165 billion, driven by strong demand in the first two months of this year prior to the enhanced community quarantine (ECQ) that was imposed to curb COVID-19 contagion starting mid-March. This contributed to total asset growth of 1.8 percent year-on-year to P240.3 billion.
On the funding side, low-cost deposits improved by 10.2 percent, reaching P60.6 billion.
Net service fees, on the other hand, reached P458.1 million, lower than last year’s level of P468.48 million.
“During the quarantine period, the bank continued to operate 80 percent of its branches while keeping in place precautionary measures to ensure that our customers and employees are safe. Both customer and IT support were further strengthened to keep our online banking services available 24/7, this being the alternative banking channel during these times,” Alde said.
On asset quality, bad loans stood at 3.7 percent of total loan portfolio.
PSBank’s capital ended the quarter at P34.8 billion. Capital Adequacy Ratio (CAR) to risk assets stood at 17.2 percent, well above the regulatory minimum of 10 percent.