PBB seen posting strong revenue growth

Philippine Business Bank (PBB), controlled by Alfredo Yao of Zest-O Corporation, is expected to exceed its historical growth rate in revenues on the back of higher loan volume and yield.

According to Philippine Rating Services Corporation (PhilRatings), PBB’s net interest income has consistently posted growth in the last five years (2013-2017), accounting for 65.1 percent to 89.6 percent of total revenues.

Interest income on loans and receivables significantly went up by 33.4 percent to 13.7 billion in 2017, attributable to higher loan volumes and loan yields.

“This trend is expected to continue, going forward. Revenues are forecast to grow much faster than historical performance, as combined increases in loan volume and rates lead to interest earnings growth,” PhilRatings said.

This is among has the reasons why PhilRatings the bank a high issuer rating of PRS Aa minus (corp.) which means it has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.

“The issuer rating for PBB takes into account the expansion of the bank’s core lending business, which is supportive of revenue growth; above satisfactory asset quality; and a funding profile which is biased towards high-cost deposits,” PhilRatings said.

Also taken into consideration is PBB’s target market, which presents opportunities but also faces significant non-finance challenges. (JAL)