PNB eyes foreign partner, bank acquisition

MANILA, Philippines — Tan-led Philippine National Bank (PNB) plans to take in strategic foreign investors as it remains on the lookout for possible acquisition opportunities as the bank’s asset base broke the P1-trillion level.

In a press conference, PNB president and chief executive officer Jose Arnulfo Veloso said the bank is in talks with potential strategic foreign investors as it remains on the lookout for possible acquisitions.

“The owners are open to have a strategic partner of a minority share in the bank of around 20 to 25 percent. But I think that is not what we are putting a lot of attention on right now. What we are putting attention to right now is to acquire a bank that can bring PNB to the next level,” he said.

LTG Group Inc. of tobacco and airline magnate Lucio Tan has an indirect ownership of 59.83 percent in PNB.

“There are discussions for us having investors, but there are prospects for us to be able to acquire banks, but we are not yet in the kind of discussion to allow us to be able to say that we are in very serious talks,” he said.

Veloso said PNB is looking for a bank that would complement the bank’s overall strategy.

The listed bank is absorbing PNB Savings Bank as it intends to ramp up its consumer finance business.

“Our major customer base is in the commercial banking space and also the large local corporate space. About two-thirds of our branch network is in the provinces, so we are strong in the provinces. We would like to be able to have a good consumer finance business which currently is lower than industry,” he said.

Veloso said PNB is looking for a bank or financial institution that would complement its efforts in developing its consumer finance business.

“The commercial banking space will eventually be challenged and that is where PNB is very strong that is why we are putting the savings bank back into the bank to allow ourselves to have a very good cover of the consumer finance business locally and also to be able to allow our overseas Filipino customers the ability to have a referral back of consumer finance needs into the country,” he said.

PNB’s net income jumped by 30 percent to P1.9 billion in the first quarter from P1.5 billion in the same quarter last year, as its net interest income grew by 10.9 percent to P7.1 billion with its loan book expanding by 17 percent to P588.9 billion.

Trading and foreign exchange gains reached P856 million from P45 million, while net service fees and commission income went up by 14 percent to P967 million. Its deposit base increase by 13 percent to P744.8 billion.

PNB strategy and financial sector head Chester Luy said the bank has earmarked P4 billion for capital expenditures this year, of which half or P2 billion would be used for information technology (IT) upgrades or digitalization.

Luy said the budget would come from various sources including proceeds of fund raising activities such as the ongoing P100-billion peso bond program, its planned P12 billion stock rights offering, and the recently concluded P8.22 billion long term negotiable certificates of deposits (LTNCDs).