Philippine Business Bank earned ₱2,783.7 million core income, up 41.9% YoY Provisions for loan loss reserves reached ₱2,335.8 million, 4x higher than in 2019

Pre-tax pre-provision profit (PTPP) expands amidst COVID-19 pandemic:

Net interest income increased by 23.7% Year-over-Year (YoY) to ₱5,627.6 million for 2020

Core Income reached ₱2,783.7 million, a 41.9% increase YoY Trading gains grew to ₱749.3 million, a growth of 2.6x YoY

Pre-tax pre-provision profit reached ₱3,533.1 million, up 56.7% YoY Net income ended at ₱938.9 million for the year

Sustained balance sheet growth despite a challenged economy:

Total resources stood at ₱119.8 billion from ₱114.1 billion in 2019 Loans and other receivables at ₱89.3 billion versus last year’s ₱87.3 billion

Total deposits increased to ₱100.4 billion

Total equity grew by ₱1.0 billion to ₱13.9 billion

Caloocan City, Philippines – Philippine Business Bank (PSE: PBB) reported an interest income of ₱7,103.2 million for year-end 2020. Core income grew to ₱2,783.7 million from ₱1,961.6 million, a 41.9% increase YoY. Trading gains expanded to ₱749.3 million from ₱292.7 million in 2019, up 2.6x. Pre-tax preprovision profit rose to ₱3,533.1 million, up 56.7%.

“In spite of the difficulties posed by the COVID-19 pandemic, PBB was able to grow its core business. In response to the pandemic and the subsequent recession, the Bank pursued an accelerated provisioning strategy, setting aside a total of ₱2,335.8 million for loan loss reserves, more than four (4) times higher than last year’s amount of ₱561.2 million. This provisioning will help cushion the Bank from the uncertainties surrounding the pandemic. Both the Bank’s core income and pre-tax pre-provision profits improved in 2020, exhibiting the Bank’s ability to generate cash earnings, reaching ₱2,783.7 million and ₱3,533.1 million, respectively. The challenge, however, is in managing the Bank’s quality of risk assets moving forward,” said Roland Avante, Vice chairman, president and CEO of Philippine Business Bank.

Total loans and receivables grew to ₱89.3 billion as of December 2020.

Total resources reached ₱119.8 billion in 2020 from ₱114.1 billion in 2019. On the funding side, deposit liabilities increased to ₱100.4 billion at the end of December 2020. Current and savings deposits (“CASA”) grew 14.6%, while time deposits (“TD”) reached ₱50.4 billion. Management of the Bank’s deposit portfolio improved deposit mix from 46:54 to 50:50 CASA to TD ratio.

Shareholders’ equity was at ₱13.9 billion, equivalent to a book value per share of ₱20.59 net of preferred shares. Net interest margin also improved to 5.00% in 2020 against 2019’s 4.52%. The Bank’s minimum liquidity ratio ended at 26.60%, above the statutory 20.00% requirement. Over the last five years, the Bank’s net book value per share has grown 11.0% per year, from ₱12.19 at the end of 2015 to ₱20.59 in 2020.

“2020 would have been a great year as evidenced by our cash earnings via core income and PTPP, nevertheless, PBB took necessary steps to manage risks by adhering to proven lending and account management processes and procedures. A key focus of marketing initiatives was directed towards high-quality accounts: existing clients and borrowers with a track record of sustainable earnings in industries that are able to withstand the impact of the pandemic. Strengthened collection policies, restructuring programs, and the usual focus on deepening relationships with our SME clients continue to be our primary objectives. We also plan to continue to improve our deposit mix, in anticipation of a tightening margin environment in the core interest differential business.

As we face another year with the pandemic continuing to impact the economy, PBB continues to strengthen its core business by being cognizant of the evolving needs of the SME segment. The Bank remains committed to its investments in systems and technology in line with the Bank’s digitization efforts. The Bank would not have developed a resilient earnings stream and built a robust balance sheet without the support of its loyal clients, supportive shareholders, and dedicated employees. PBB extends its gratitude to our regulators, the Banko Sentral ng Pilipinas, for their continued support and leadership during these challenging times,” said Avante.