PBCom profit plunges 62% in 9 months

MANILA, Philippines - Earnings of Philippine Bank of Communications (PBCom) plunged 62.3 percent in the first nine months on the back of lower income from investment securities, lower gains from trading and securities and foreign exchange operations as well as higher operating expenses.

PBCom said its net income amounted to P148.97 million from January to September, P248.14 million lower compared to P397.11 million in the same period last year.

The bank reported a 9.3 percent decline in interest income to P2.27 billion from P2.5 billion due to the 20.3 percent drop in earnings from investment securities and the eight percent decline in profits from loans and receivables.

The bank’s interest and finance charges decline by about two percent to P697.5 million from P711.56 million, translating to a 12 percent drop in net interest income to P1.57 billion from P1.79 billion.

PBCom’s total operating income increased 10.2 percent to P2.6 billion from P2.36 billion as a result of higher rental income as well as service charges and fees in the first nine months of the year.

The higher operating income was achieved amid the decline in trading and securities as well as foreign exchange gains due to the deteriorating market prices of government securities and consequent absence of trading income opportunities.

PBCom reported a 21.5 percent surge in operating expenses to P2.2 billion from January to September this year compared to P1.81 billion in the same period last year due to increase in taxes and licenses as well as depreciation and amortization costs.

The bank’s total assets remained steady at P70.52 billion.

Lucio Co, who owns the Puregold supermarket chain, acquired a 49.99 percent stake in PBCom last year. Former trade minister Roberto Ongpin previously owned PBCom.

The tycoon’s P.G. Holdings Inc. subscribed 181.08 million common shares of PBCom at P33 per share equivalent to a 37.7 percent interest for a total consideration of P5.9 billion.

Co also acquired 59.2 million PBCom shares owned by ISM Communications Corp. at P33 per share for a total consideration of P1.95 billion raising his stake in the bank by another 12.32 percent to 49.99 percent.

PBCom acquired Rural Bank of Nagcarlan Inc. and Banco Dipolog Inc. in 2014.

As of end September, PBCom has a total branch network of 82 and 11 other banking offices after opening five branches and two other banking offices in the first half of the year. The bank has 172 ATMs nationwide.