PHILIPPINE BANK of Communications (PBCom) recorded a 3.7% rise in its net profit last year on the back of an increase in its net interest income and fees and commissions.
The bank’s attributable net income stood at P1.63 billion in 2022, higher than the P1.57 billion recorded in 2021, according to its annual report disclosed to the local bourse on Tuesday.
“The full-year result reflects the bank’s robust business model as growth in net interest income, fees and commissions and FX (foreign exchange) gains offset the impact of revenue headwinds from trading activities,” PBCom said in a statement.
This translated to a return on average equity to 10.97%, lower than the 11.78% in 2021, and a return on average assets of 1.39%, also down from 1.49% the year prior.
“Return on average equity decreased by 81 bps (basis points) from higher provision for income taxes and total operating expense from the results of the current operations,” PBCom said.
The bank’s net interest income grew by 13.3% to P4.81 billion from P4.245 billion the year prior “as interest earning asset grew 16.5% to P107.8 billion, largely funded by P58.2 billion in low-cost deposits, which comprises 58.5% of the bank’s total deposits.”
Net interest margin slipped to 4.8% last year from 4.83% in 2021.
Interest income from loans and receivables increased by 11.81% to P4.595 billion.
The lender also saw earnings from service charges, fees and commissions increase by 17.6% to P390.11 million last year.
Net foreign exchange gains jumped by 40.82% to P97.65 million last year from P56.83 million in 2021.
“These increases were partially offset by P124.73-million higher net trading losses, reflecting the adverse effects of a rising interest rate environment on the bank’s peso and dollar bond portfolios, and P85.23-million reduction in rental income due to pre-terminations and renegotiated contracts of tenants as a result of the COVID-19 (coronavirus disease 2019) crisis,” the bank said.
The bank saw its net trading and securities loss grow to P366.327 million last year from P241.598 million in 2021.
PBCom’s total operating income posted a 9.4% increase to P5.562 billion from P5.084 billion in 2021.
On the other hand, its operating expenses rose by 4.6% to P3.41 billion last year.
“The bank’s cost-to-income ratio improved to 56% from 57.7% despite additional spending on strategic initiatives in relation to business development and investments in information technology,” PBCom said.
The bank’s net loan portfolio grew by 18.74% to P76.92 billion.
Despite the increase in loans, the group’s gross nonperforming loan (NPL) ratio eased to 3.23% at end-2022 from 4.89% in 2021. NPL coverage improved to 110.7% last year from 80% in 2021.
Meanwhile, deposits increased by 14.37% to P99.44 billion.
The bank’s capital base grew by 9.8% to P15.57 billion. Its capital adequacy ratio dropped to 17.07% from 18.18% the year prior and its common equity Tier 1 ratio went down to 14.62% from 15.58%.
Total assets stood at P124.878 billion at end-2022, up by 14.3% year on year.
PBCom began operating as a universal bank on Dec. 1, 2022.
The bank had 91 branches and 4 branch-lites as of Dec. 31, 2022.
Its shares were last traded on April 13, closing at P15 apiece. — AMCS
