PNB winds down JV with Mizuho Leasing

MANILA, Philippines — Philippine National Bank (PNB) is winding down its joint venture with Mizuho Leasing Ltd. of Japan due to the impact of the  pandemic.

In a disclosure to the Philippine Stock Exchange, the Lucio Tan-led bank said its board of directors approved a proposal to amend the articles of incorporation of PNB-Mizuho Leasing and Finance Corp. (PMLFC) to shorten its corporate term to March 31, 2024.

“PNB and Mizuho Leasing mutually agreed to wind down operations of PMLFC due to the impact of the COVID-19 pandemic to the operations of the joint venture company and the domestic leasing industry,” the bank said.

The joint venture financing firm started its operations in the Philippines in 1998. Among its services include finance lease, operating lease, term loans, and receivable discounting.

PMLFC, formerly PNB-IBJL Leasing and Finance Corp., is a joint venture between the PNB with 75 percent and Mizuho Leasing Co. with 25 percent incorporated on April 24, 1996 as a financing company under Republic Act   8556 or the amended Finance Company Act.

PMLFC is focused on the needs of Japanese firms with a local footprint, as well as small- and medium-sized enterprises.

In February last year, the board of directors of PNB approved the infusion of up to P515 million in additional capital to PMLFC in anticipation of opportunities in the leasing business amid the government’s massive infrastructure build up.

This was supposed to raise PNB’s stake on the joint venture to 83.5 percent from 75 percent.

From January to March, PNB’s net income jumped by 57 percent to P2.81 billion  from P1.79 billion in the same quarter last year on improved net interest income and net reversals of credit provisions.

The bank’s total assets amounted to P1.1 trillion in end-March, primarily driven by higher investment securities and other liquid placements despite the reduction in loans.