Philippine Business Bank earnings flat at P1.8B on lower trading gains
Volatile trading amid geopolitical uncertainties hampered growth on PBB’s financial performance.
MANILA, Philippines — Losses from trading activities amid geopolitical unrest offset growth in the lending business of Philippine Business Bank (PBB) last year. PBB’s bottom line ended flat at P1.8 billion.
PBB said in a regulatory filing its core earnings had grown by 10.9 percent to P3.4 billion. These cover interest income, service fees and miscellaneous income.
Net interest income also increased by 4.36 percent to P6.7 billion.
The thrift bank ended the year with P128.3 billion in net loans and other receivables, up by 9 percent.
However, growth was offset by the bank’s dismal trading performance, according to PBB vice chair, president and CEO Rolando Avante.
“This is because despite the overwhelming indications pointing the other way, the interest rate environment toward the tail-end of 2024 turned out to be different from expectations, driven mainly by geopolitical factors and events,” Avante said in their disclosure.
PBB said volatility in the fourth quarter resulted in a full-year net loss in trading activities of P87.6 million. This is from a gain of P287.8 million in 2023.
This year, Avante said they would focus more on the profitability of its core lending business, specifically consumer loans.
Efforts to become a universal bank
PBB is also seeking a universal banking license. This will widen its services to include investment banking, insurance and trust services, among others.
A universal banking license also gives a bank the power to fully own thrift and rural banks.
READ: PBB seeks partner for unibank license dream
Last year, Avante said they were looking for a private equity partner to help boost the bank’s financial technology capabilities. This will move the firm closer toward clinching a universal banking license.
A private equity fund’s investment is often seen as a way to increase a company’s value, particularly through capital infusion.
By December, the bank was only around P300 million short of the P20-billion minimum capital required for the license.
