MANILA, Philippines—Philippine Savings Bank, the thrift bank of the Metrobank group, grew its first-quarter net profit by 94 percent year-on-year to P546 million as hefty trading gains complemented an expansion in interest earnings.
“Our first quarter loan releases have exceeded our forecast. We are experiencing strong demand for loans with new mortgage loan releases growing by 32 percent versus the similar period last year. Given the strong first quarter results, we are raising our loan growth targets. Should this trend continue, we may exceed our net income target of P2.2 billion for the year,” PSBank president Pascual Garcia III said in a press statement.
PSBank chief finance officer Perfecto Ramon Dimayuga Jr. said in a press briefing that the bank generated P1.41 billion in net interest income in the first quarter, up by 4 percent from a year ago, as the bank expanded its earning assets.
Gross loans expanded by 11 percent to P62.7 billion with both auto and mortgage loans posting double digit growth. Auto loans rose by 13 percent in spite of lingering supply issues due to the Thailand floods last year. Mortgage portfolio increased by 10 percent, benefitting from the bank’s growing branch network and improved penetration of key mortgage developers.
PSBank had originally projected a 10-percent growth in its loan book this year but Garcia said lending growth was turning out to be faster than originally expected.
The bank’s first-quarter earnings were also boosted by P1.7 billion in trading gains, up by about 500 percent from a year ago. The reduction in interest rates by the Bangko Sentral ng Pilipinas boosted the bank’s investment portfolio.
Meanwhile, the thrift bank reported a P6.6-billion increase in deposits in the first quarter as it opened six additional branches, thus increasing its branch network to 206. It has also built up the seventh largest automated teller machine network in the country with 515 ATMs.
PSBank’s capital has also gone up by 24 percent to P14.7 billion, supplemented by its P3-billion issuance of subordinated debt qualifying as tier 2 capital in February. This brought its capital adequacy ratio to risk assets to 18 percent in March.
In line with the bank’s thrust to further strengthen its balance sheet, additional provisions of P715 million were booked during the period. The coverage ratio increased to 98 percent of the non-performing loan ratio which accounted for 2.9 percent of total loans.