PBB books higher Q1 profit

PHILIPPINE Business Bank, Inc.’s (PBB) net income in the first quarter surged by 93.4% to P309.96 million on the improved performance of its core businesses.

The bank said in a disclosure to the stock exchange on Thursday that its first-quarter performance went up from the P160.23 million it booked in the same period last year.

This translated to a return on average equity of 8.68% as of March, up from 8.24% at end-2021, and a return on average assets of 0.94% versus 0.93%.

“PBB achieved solid first-quarter results… The bank’s 2021 operating expenses were within the expected levels and 2022 expense growth is attributable to business improvements,” PBB President and Chief Executive Officer Rolando R. Avante said in a press release.

“For the rest of the year, we are seeing strong loan growth and persistent demand from our clients for their funding needs. As the economic conditions improve, we are expecting to sustain a healthy expansion of risk assets to continue into the latter half of the year,” Mr. Avante said.

Broken down, PBB booked a net interest income of P1.3 billion in the first three months of the year, down by 5.1% from P1.36 billion in the same period in 2021.

Meanwhile, non-interest income excluding trading gains ended at P178.17 million.

Core income went up to P732.3 million from P725.2 million.

The bank’s earnings from service charges, fees and commissions increased to P126.13 million from P28.41 million.

Miscellaneous income also went up to P201.4 million on higher collections of loan penalties.

On the other hand, non-interest expenses increased by 18.7% to P890.8 million from P750.6 million in the first quarter of 2021 due to higher salaries and other employee benefits amid a low base.

PBB’s cost-to-income ratio went up to 60.44% in March 2022 from 56.27% in December 2021.

The bank’s net loans and other receivables as of the first quarter of 2022 stood at P89.36 billion, down by 2.5% versus end-2021’s P91.67 billion.

Nonperforming loans (NPL) went up to P5.07 billion at end-March from P3.98 billion as of December 2021. This caused the NPL ratio to rise to 5.63% from 4.33%.

Loan loss reserves were at P4.77 billion as of March, while the bank set aside loan loss provisions worth P150 million in the first quarter.

On the funding side, deposits with the bank stood at P111.28 billion as of March, down from the P112.42 billion seen at end-2021 due to lower current account, savings account deposits.

The loans-to-deposit ratio as of March 2022 was at 80.3%, down from 81.55% as of December 2021.

The lender’s total resources stood at P131.14 billion as of March.

Assets inched down 0.7% to P131.15 billion at end-March from P132.03 billion at end-2021 “primarily owing to the decrease in loans and other receivables,” the bank said.

PBB’s capital adequacy ratio reached 14.2% as of March, up from 11.8% at end-2021. while its common equity Tier 1 ratio was at 13.3% versus 11.1%.

“We have previously expressed our goal of raising growth capital to further support the continued development of the bank’s businesses and expand its business initiatives. A bigger capital base will help the bank capitalize on opportunities we are seeing from our deal pipeline,” Mr. Avante said.

PBB shares closed unchanged at P7 apiece on Thursday — K.B. Ta-asan