Higher expenses cut PBCom income by half

MANILA, Philippines - Earnings of Lucio Co-controlled Philippine Bank of Communications (PBCom) was cut to almost half in the first six months of the year on the back of trading and securities losses, lower foreign exchange revaluation, and higher operating expenses.

In a report submitted to the Philippine Stock Exchange (PSE), PBCom said its net income reached P83.52 million in the first half of the year, 56.1 percent lower compared to P190.43 million in the same period last year.

The bank reported a 15.4 percent increase in interest income from investment securities as well as loans and receivables to P1.65 billion from January to June this year compared to P1.43 billion in the same period last year.

The bank’s interest and finance charges, likewise, went up 10.6 percent to P503.57 million in the first half of the year from a year ago level of P455.47 million.

PBCom’s total operating income surged 27 percent to P1.74 billion from P1.37 billion as a result of higher rental income as well as service charges and fees in the first half of the year.

The higher operating income was achieved amid the P14.15 million in trading and securities losses in the first half of the year compared to a net gain of P41.57 million in the same period last year due to the deteriorating market prices of government securities and consequent absence of trading income opportunities.

The bank’s foreign exchange gains likewise plunged 38.1 percent to P15.81 million from P25.54 million.

PBCom reported a 42 percent surge in operating expenses to P1.52 billion from January to June this year compared to P1.07 billion in the same period last year due to increase in taxes and licenses as well as depreciation and amortization costs.

The bank’s total assets stood at P72.65 billion while total liabilities amounted to P65.34 billion in end June this year.

Co, who owns the Puregold supermarket chain, acquired a 49.99 percent stake in PBCom last year. Former trade minister Roberto Ongpin previously owned PBCom.

The tycoon’s P.G. Holdings Inc. subscribed 181.08 million common shares of PBCom at P33 per share equivalent to a 37.7 percent interest for a total consideration of P5.9 billion.

Co also acquired 59.2 million PBCom shares owned by ISM Communications Corp. at P33 per share for a total consideration of P1.95 billion raising his stake in the bank by another 12.32 percent to 49.99 percent.

PBCom acquired Rural Bank of Nagcarlan Inc. and Banco Dipolog Inc. in 2014.

As of end June, PBCom has a total branch network of 81 and 11 other banking offices after opening five branches and two other banking offices in the first half of the year. The bank has 170 automated teller machines nationwide.