PSBank triples bad loans provision

MANILA, Philippines — Philippine Savings Bank (PSBank), the thrift arm of Metropolitan Bank & Trust Co., tripled its provision for potential loan losses to P6.4 billion as non-performing loans (NPLs) increased due to the impact of the COVID-19 pandemic.

Jose Vicente Alde, president of PSBank, said the bank stayed resilient amid the challenges of 2020 on the back of its strong balance sheet and capitalization.

“As a matter of strategy, we took a conservative stance on credit provisioning in anticipation of risks associated with the pandemic. The bank prioritized the safety of its employees and customers by quickly instituting COVID-19 safety protocols,” he said.

Due to uncertainties brought about by the global health crisis, the bank’s NPL ratio increased but remained manageable at 5.2 percent last year from 3.6 percent in 2019.

As a result, its bottom line declined by 63 percent to P1.11 billion from P3.03 billion booked in 2019.

Without the higher provisioning, PSBank’s operating income would have jumped 31 percent to P7.45 billion last year.

Its net interest income also jumped 21 percent to P13.75 billion, owing to a significant 16 percent growth in low cost checking and savings account (CASA) deposits to P67.25 billion.

In line with initiatives to improve operating efficiencies, operating expenses were kept in check and increased by only two percent.

PSBank’s capital position remained strong at P34.51 billion, while total capital adequacy ratio and common equity Tier 1 ratio further improved year-on-year to 19.4 percent and 18.1 percent, respectively.

The bank’s asset base reached P219.41 billion.

PSBank strengthened its digital platforms as enrollments and utilization increased 56 percent and 143 percent, respectively, amid the shift in consumer behavior due to mobility restrictions put in place by the government to slow the spread of the deadly disease.

“We strengthened our digital platforms and made them reliable as the demand for digital banking services exponentially rose,” Alde said.

He said the bank would continue to pursue its digital transformation roadmap by delivering on what is relevant and simple for the customers.

“As the economy slowly opens up in 2021, we shall remain positive and hopeful that our recalibrated business models will deliver and continue to adapt to the new environment,” Alde said.