FNB customer deposits, advances decline
In the continued economic uncertainty, First National Bank ( FNB) says it continues to apply a prudent approach to lending to ensure responsible and manageable consumer exposure.
The bank recorded three percent decline in gross customer advances against market gross customer advances increasing by five percent in the half year period ended December 2021.
Presenting the Financial results for the half year period, FNBB Chief Executive Officer, Steven Bogatsu highlighted that the bank’s retail advances experienced a moderate decline of two percent while the national retail market increased by six percent.
“The decline was driven by competitive pressures, with the market seeming to relax its risk appetite by extending loan tenures, thus increasing total market debt. The bank maintained its existing affordability criteria and a selective approach to retail exposure. The corporate segment experienced excellent growth of 10percent year- on- year.”
He said the bank maintained its existing affordability criteria and a selective approach to retail exposure. The corporate segment experienced excellent growth of 10 percent year- on- year. During the period, the bank profit increased by 38 percent to P450.4 million.
The bank also experienced four percent decline in customer deposits from P22.4 billion to P21.6 billion driven by a reduction in corporate deposits, following corporate outflows as trading levels normalised. In the retail segment, deposit remained flat while the business segment experienced moderate growth. Bogatsu said FNBB remains well funded with a loan to deposit ratio of 71 percent and has access and options to raise additional funding from the market.
However, the bank’s investment securities declined by 26 percent following the reduction in deposits as well and a reduction in investible capital due to the special dividend paid during the six month period.
During 2021, the bank rate remained unchanged at 3.75 percent despite a significant upswing in inflation.