PNB: Accomplishing more for less

Since the Lucio Tan Group took over the helm of Philippine National Bank (PNB), the bank’s corporate ideology has gone a radical shift towards accomplishing more using less resources.

Bank president Feliciano Miranda said the Tan group’s management philosophy revolves around the basic tenets of efficiency and economy in handling PNB’s day-to-day affairs.

As soon as Tan’s management team took control of the bank in 2000, Miranda said the first order of business was the reduction of big ticket expense items beginning with directors and officers’ compensation, termination of various consultancy agreements and employee right-sizing programs.

For the first seven months of 2001, Miranda reported that compensation expense was reduced by P134 million as a result of the continuing special separation program for employees. Repairs and maintenance was down by P28 million; stationery and supplies by P13 million; postage, telephone and cable reduced by P17 million; and travel costs slashed by P12 million.

However, Miranda stressed that rationalizing operating costs is just one of the strategies being pursued by management to nurse PNB back to financial health. He said aggressive loan collection efforts and deposit generation continue to be the primary thrusts of PNB.

Proof of the growing confidence in the bank’s management is the remarkable increase in deposits to P130 billion for the first seven months of 2001. This figure is roughly 10 percent higher than the P119-billion deposits recorded at the end of year 2000.

He added that in less than a year since Tan took over PNB, the taipan infused an additional capital of P20.3 billion. This fresh capital, together with certain terms of the proposed rehabilitation plan for PNB, will enable the bank to meet the strict capital adequacy requirements imposed by the Bangko Sentral ng Pilipinas.

In the same aggressive manner, Miranda said PNB’s current management is working double time to cleanse the bank’s non-performing loans and real and other properties owned and acquired (ROPOA). He said ROPOA sales have increased to a record P1.3 billion in the first seven months of 2001.

The bank, he stressed, is optimistic that approval of the rehabilitation plan would further sustain and boost PNB’s gains. He said he expects the bank to immediately post profits in its first year. "All we need," he said, "is continuing support from government and approval of the rehabilitation plan which is crucial to our recovery efforts."