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PSBank third quarter profit weighed down by surge in provisions

psbank third quarter profit weighed down by surge in provisions 816x540 - PSBank third quarter profit weighed down by surge in provisions

Philippine Savings Bank (PSBank) reported a sharp decline in net profit for the third quarter, joining an industry-wide trend of increased provisioning as the economy weakened under pressure from a prolonged lockdown.

In the three months to September, net income dropped to P36.8 million from P813 million a year earlier, according to its disclosure to the Philippine Stock Exchange Friday.

Interest income declined 8% year-on-year to P3.6 billion in the third quarter. Reserves for bad loans surged to P2.5 billion from P545 million a year earlier.

PSBank, the thrift unit of Metropolitan Bank & Trust Co. (Metrobank), said profit in the nine months to September was P1.33 billion, down 39% year-on-year.

Gross revenue rose 23.9% to P13.3 billion in the nine months as net interest income grew 27.6% to P10.4 billion.

During the period, operating income grew 11.9% to P2.8 billion, buoyed by higher trading gains.

Total loans at the end of September amounted to P150.4 billion, while the net non- performing loan ratio was 4%. Loan loss provisions for the nine-month period amounted to P5.3 billion, three times the year-earlier level. The bank attributed this to the pandemic, which placed clients’ finances under stress.

"PSBank continues to take a conservative stance on credit provisioning amid the present business landscape while leveraging operating efficiencies and focusing on our digital transformation roadmap," PSBank President Jose Vicente L. Alde said. Deposits rose to P24 billion from P22 billion at the end of 2019, while total assets amounted to P214.7 billion from P224.9 billion.

"PSBank has seen an exponential rise in the use of its digital banking services, and is committed to improve on them given the fast adoption of consumers to non-contact platforms brought about by the pandemic," PSBank said.

Total assets amounted to P214.7 billion, while capital was P34.9 billion. The capital adequacy ratio was 18.65% and common equity tier-1 ratio at 17.7%. PSBank closed at P53.40, down 10 centavos. — Kathryn Kristina T. Jose

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