PBB earnings decline due to higher provisioning

Published April 16, 2021, 6:00 AM

by James A. Loyola

Philippine Business Bank reported a 25 percent drop in net income to P938.9 million last year from P1.26 billion in 2019 due to higher provisioning.

In a disclosure to the Philippine Stock Exchange, the bank said core income grew 41.9 percent to P2.78 billion in 2020 from P1.96 billion in the previous year.

Interest income amounted to P7.1 billion for year-end 2020 while trading gains expanded to P749.3 million from P292.7 million in 2019. Pre-tax pre- provision profit rose 56.7 percent to P3.53 billion. 

“In spite of the difficulties posed by the COVID-19 pandemic, PBB was able to grow its core business,” said PBB Vice Chairman and President Roland Avante. 

He added that, “In response to the pandemic and the subsequent recession, the Bank pursued an accelerated provisioning strategy, setting aside a total of P2.34 billion for loan loss reserves, more than four times higher than last year’s amount of P561.2 million.”

Avante explained that, “This provisioning will help cushion the Bank from the uncertainties surrounding the pandemic… The challenge, however, is in managing the Bank’s quality of risk assets moving forward.”

Total loans and receivables grew to P89.3 billion as of December 2020. Total resources reached P119.8 billion in 2020 from P114.1 billion in 2019.

On the funding side, deposit liabilities increased to P100.4 billion at the end of December 2020. Current and savings deposits (CASA) grew 14.6 percent, while time deposits reached P50.4 billion.\

Avante said “2020 would have been a great year as evidenced by our cash earnings via core income and PTPP, nevertheless, PBB took necessary steps to manage risks by adhering to proven lending and account management processes and procedures.”

He added that, “As we face another year with the pandemic continuing to impact the economy, PBB continues to strengthen its core business by being cognizant of the evolving needs of the SME segment. The Bank remains committed to its investments in systems and technology in line with the Bank’s digitization efforts.”