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 set aside a bigger reserve fund for loan defaults as a result of the fallout from the new coronavirus disease (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 the 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 that was imposed starting mid-March to curb the spread of the virus. The increase in loan bookings 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.
On asset quality, bad loans stood at 3.7 percent of total loan portfolio.
PSBank ended the quarter with P34.8-billion capital. Capital adequacy ratio to risk assets stood at 17.2 percent, well above the regulatory minimum of 10 percent. —DORIS DUMLAO-ABADILLA INQ