PBCom income steadies in 2020

MANILA, Philippines — Philippine Bank of Communications (PBCom) withstood the financial carnage of the pandemic last year as it kept its net income steady on gains made in trading and securities.

In a disclosure to the stock exchange yesterday, the Lucio Co-controlled bank said its net income grew by one percent to P1.16 billion in 2020 from P1.15 billion in 2019.

PBCom managed to push its profits by more than P11 million despite taking in a provision of P1 billion for lending losses as a consequence of credit score deterioration.

Likewise, operating income jumped by nearly 17 percent to P5.89 billion. Net interest income also went up by more than 22 percent to P3.92 billion due to a drop in interest expense from reduced cost of fund and weakened volume.

PBCom also attributed its growth to the increase in corporate loans availed last year. The bank, in turn, weathered the decline in yields due to the extension of payment deadlines as mandated by the Bayanihan to Heal as One Act.

On the other hand, rent income fell by over eight percent to P673.41 million.

However, trading and securities gains offset the drop with a growth of 58 percent to P654.73 million,.

Meanwhile, service charges, fees and commissions slid by almost five percent to P389.09 million.

Non-performing loans ratio rose by two percent to 5.71 percent last year from 3.82 percent in 2019. PBCom met all of its financial obligations and loan commitments in 2020, and vowed to stay liquid as a banking institution in the face of a pandemic.

The Puregold owner’s banking business also said it fulfilled its regulatory reserve requirements through the use of a mix of funding sources throughout last year. As such, PBCom expects its cash flow, as well as its liquidity standing, to stay above water for 2021.

“The bank does not foresee any events that will trigger a direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation,” the bank said.

PBCom also said it is tempering the expansion of its loan portfolio and approval of new lending to moderate the impact of the pandemic on its operations.