PSBank 2010 Net Income Up 46% to PhP1.8B

Philippine Savings Bank (PSE: PSB), the thrift bank arm of the Metrobank Group (PSE: MBT), reported a 2010 audited net income of PhP1.8 billion, an increase of 46% or PhP568 million compared to the PhP1.2 billion recorded the previous year. PSBank had breached its PhP1.4 billion 2010 net income target as early as the third quarter last year. With continuing improvements in its core revenues in 2011, PSBank expects to have a net income of PhP2 billion by the end of the year.

The net income of the country’s second largest thrift bank is supported by the growth in assets from PhP93.1 billion to PhP104.1 billion. Of this amount, gross loans expanded by 15% to PhP55.6 billion with auto loans rising by 27%, mortgage loans by 11% and personal loans by 9%. The bank’s investments portfolio, on the other hand, contributed an increase of 13% to PhP26.2 billion.

“The Bank’s outstanding performance and growth in market share in 2010 were due to strong consumer demand, backed by product improvements and excellent customer service. Price is not the only factor that customers consider, they also look for speed in delivery, convenience and reliability,” PSBank President Pascual M. Garcia III said.

Total net revenues was higher by 31% at PhP8.3 billion in 2010 from PhP6.4 billion previously. This mainly resulted from improved net interest income, which reached PhP5 billion with robust income from loans and investments. Meanwhile, other operating income for the year improved 117% arising from the growth in fee income, foreign exchange and trading gains.

Its NPL amount, net of fully provided loans, declined to PhP2.5 billion in 2010 from PhP3.1 billion. Likewise, PSBank set aside PhP912 million in provisions for the year, allowing its NPL coverage ratio to increase to 71% from 68% as of end-2009.

Deposits grew by 13% to PhP87.5 billion. PSBank continues to expand its reach by opening a total of 10 branches and adding 57 new offsite ATMs last year. The Bank ended the year with a network of 180 branches and 380 ATMs nationwide. It is seen to open 15 new branches and an additional 70 offsite ATMs in 2011.

“Branch and ATM expansion will continue in 2011. We believe in bringing the PSBank experience closer to more customers. This allows us to offer our products to a bigger market,” Garcia added.

The Bank’s capital adequacy ratio was placed at 15.37%, well above the 10% minimum required level for local banks. Return on Equity, net of unrealized gains, was at 16% as of December 2010. PSBank’s shares ended the year at PhP64.00 per share from PhP57.50 per share in end-2009. In 2010, PSBank declared a 27.5% special cash dividend last February and cash dividends equivalent to a 1.5% per quarter. The 2010 fourth quarter dividend declaration was recently approved by its Board of Directors and is now for BSP’s approval.

PSBank will be exercising the call option on its PRS Aaa-rated Tier 2 bond worth PhP2 billion on January 27, 2011. The bonds were issued in January 2006 and have an original maturity of 10 years, but with an option to call the instruments after five years.

The Bank, which celebrated its 50th anniversary last September, recently launched the PSBank Prepaid MasterCard, a re-loadable ATM card, debit card, remittance card, and Internet cash card all rolled into one. It allows cardholders to spend within their means while providing the convenience of cashless shopping and 24/7 access to their funds.

PSBank also has Prime Rebate, the only loan rebate program in the market which gives rebates to customers who make advance or excess loan payments.