PNB to hike ROE to 15% by next year

MANILA, Philippines - The Philippine National Bank (PNB) will concentrate on bringing up its return-on-equity (ROE) to 15 percent within the next two years, a top bank official said.

PNB president Omar Byron Mier said PNB management would concentrate on improving the bank’s revenues and profitability.

“As far as what will happen in the bank, it is a discussion among the shareholders because we are just on the management level,” he said. 

He said there are still talks on the proposed merger with Ayala-owned Bank of the Philippines (BPI).

“No, we haven’t heard anything normally we’re the last ones to know so it’s gonna be stockholder to stockholder,” he said, when asked if discussions on the merger have already stopped.

On the planned merger with Allied Bank, Mier said they expect this to be consummated within the first two weeks of February.

“Full integration of the bank will take another 18 to 24 months,” he said. “At the moment we are focusing on improving the profitability of the bank, bringing down the costs and everything.”

PNB, he said, would be the surviving entity after the merger. “We would be dropping the Allied (name). The instruction of the owners is to keep PNB (as the corporate name),” he said.

Aside from raising the ROE of the bank, Mier said they would try to keep projected loan growth level of 15 percent this year.

“The industry as a whole is projected to grow by 15 percent. There is a strong demand in the industry so we have to follow whatever the industry’s growth is then we follow,” he said.

He also said they would be raising funds to meet the capital requirement of the industry.

“I think there are plans eventually we will do that because we have to be compliant with Basel 3,” he added.

He said the company is optimistic that 2012 financial figures would be good. 

“I think we did pretty good last year. For most banks, 2012 turned out to be a good year,” he said.

In international operations, he said PNB would try to keep its leadership in terms of remittances.

“With the combination of Allied and PNB, we would be the largest international footprint in the Philippines. We will look into areas where we are not making money and close that operation..then shift to other model or either tie up with representative offices. In short we would cut costs, improve revenues and technology,” he said.