Philippine Business Bank Core Income Hits PhP933.7M

Caloocan—(PHStocks)—Philippine Business Bank (PSE: PBB) reported a growth of 90.9% in its core income for 2014. From PhP489.2 million in 2013, PBB’s 2014 core income stood at PhP933.7 million, an increase of PhP444.5 million and a record for the bank. Net interest income grew by more than half a billion (PhP503.1million) or 29.0% from PhP1.7 billion to PhP2.2 billion.

“Our performance in 2014 was satisfactory given the intense competition and the uncertainty with regard to record-low borrowing costs,” said President and CEO Roland Avante. “The core income we delivered in 2014, at over PhP900 million, highlights the maturation of the bank from one that is reliant on its treasury trading business to one that is a more mature and more resilient financial services firm.”

Total loans and receivables, including unquoted debt securities, was at PhP41 billion, up PhP8.7 billion or 26.9%. The bank ended 2014 with PhP39.5 billion in loans, PhP8.8 billion higher than 2013’s PhP30.7 billion. Total deposits grew 23.1%, from PhP37.9 billion to PhP46.6 billion in 2014. Low cost funds expanded 30.4% to PhP17.9 billion in 2014. Time deposits also registered a healthy growth of 18.9% from PhP24.2 billion to PhP28.7 billion in 2014.

In 2014, the Bank opened 16 new branches and ended the year at 116, a 16% increase in the Bank’s branch network from 100 at the end of 2013. As of 31 March 2015, PBB had a total of 121 branches, opening five more during the first quarter of 2015.

“We understand the importance of establishing our presence in areas with a high concentration of SMEs and entrepreneurs. While short-term performance may lag due to a drag caused by the opening of branches, and the necessary expenses associated with additional personnel and other fixed costs, we at PBB are delighted to invest for the future,” said Avante.

PBB expects to open 20 to 25 more branches for the rest of the year. The growth in the bank’s branch network has been a key factor in the growth of PBB.

Added Avante, “To put that growth into perspective, I joined PBB in November 2011. We ended that year with over PhP13 billion in total loans. That means we grew the bank’s loan’s portfolio at 42.6% per annum to end 2014 at almost PhP39.5 billion. More importantly, our NPL ratio in 2011 was at 3.6%, while we are at 1.5% at the end of 2014. That means we are expanding our business while maintaining prudence in our loan origination and loan approval processes.”

Asset quality improved even as the loan portfolio has grown rapidly. NPL cover stood at 150.7%, while the NPL ratio improved from 2.37% in 2013 to 1.52% in 2014. On the other hand, pre-tax pre-provision profit was lower by 25.8% at PhP968.5 million. Consequently, net income was lower by 46.6% at PhP536.2 million.

PBB’s total resources expanded 22.7% to PhP57.9 billion. Shareholders’ equity grew 14.2%, from PhP7 billion in 2013 to PhP8 billion in 2014.

“The expansion of the bank’s net worth from PhP7 billion to PhP8 billion is a rough, but imperfect, indicator of the growth in PBB’s intrinsic value. We believe the work we put in over the last few years has significantly improved the bank’s value – expanding the branch network, growing our risk assets, and maintaining asset quality – all these investments over the past few years are finally beginning to bear fruit. Overall, we are satisfied with the performance, but we continue to look for opportunities, both organic and inorganic, to enhance shareholder value,” said Avante. “Most importantly, our stated strategy of serving our partners – the small and medium entrepreneurs who are the backbone of the Philippine economy – has been our guiding light. While asset expansion is a key priority, we remain steadfast in our commitment to becoming a key pillar in the growth and maturation of the Philippines’ financial and business community.”