PNB sets aside P10 B for consumer banking

MANILA, Philippines - Philippine National Bank (PNB) is setting aside P10 billion from its recent capital raising program to finance the realignment of its consumer banking operations to Allied Savings Bank, which will eventually be renamed PNB Savings Bank, a top bank official said.

In an interview on the sidelines of the Annual Bankers’ Night hosted by the Bangko Sentral ng Pilipinas (BSP), PNB president and CEO Omar Mier said the amount would specifically allotted to fund the expansion of the loan portfolio of PNB Savings.

“We are just going to use the savings bank as a vehicle for the growth of consumer banking just like what the other banks are doing. We think P10 billion would be enough,” he said.

Earlier, publicly-listed PNB said it would be raising capital through a P30-billion rights offer.

Mier said transferring the consumer banking operations to their savings bank subsidiary would give them “proper focus”.

At the same time, the PNB chief said they are sticking to their 15 percent annual income growth target despite apprehensions in the banking community that margins might be dwindle because of higher spreads.

“It’s going to be tough but it (income) will still grow, just like any other banks we need to grow. Annually, we see a 15-percent growth. We will stick to that,” he said.

This year, the PNB official said they would continue their consolidation with Allied Bank.

“We just have consolidated. We want to make sure that integration is done properly. We are just rationalizing our branch network in areas where we are not located. There are also so many branches where PNB are located side by side with Allied. So we have to rationalize that,” he said.

PNB plans to issue some 162.93 million shares from Jan. 27 to Feb. 3 to stockholders of record as of Jan. 16. The stockholders are entitled to 15 new shares for every 100 shares they own.

Portion of the proceeds of the capital raising scheme would also be used to further strengthen the capital ratios of the bank under the Basel III standards which became effective last Jan. 1.

The bank would also use the proceeds from the rights offer to support the bank’s asset growth in 2014 and in subsequent years.

PNB more than doubled its net income in the first half of 2013 to P5.3 billion from P2.3 billion in the same period in 2012.

PNB said the improved earnings performance could be attributed to the strengthening of its balance sheet and improving profitability even after its merger with Allied Bank on Feb. 9, 2013.

Total consolidated resources expanded to P563.4 billion, up three percent or P15.8 billion from that reported by the merged bank in March 31, 2013.