PBCOM reports 'record-high' 2021 profits as lending business recovers

MANILA, Philippines — Philippine Bank of Communications (PBCOM) reported “record high” profits last year as its core lending business begins to recover amid easing pandemic restrictions.

In a disclosure to the stock exchange on Monday, PBCOM, which recently received a universal banking license, said consolidated net income grew 34.6% year-on-year to P1.57 billion in 2021.

It was PBCOM’s highest bottom-line since the entry of the Lucio Co Group in 2014, the company said. Explaining its financial performance, PBCOM attributed the growth to “improved performance of its core business and normalized provision for credit losses.”

“The Bank’s focus on core business, such as corporate lending and generation of low-cost deposits, has provided the Bank a steady income despite market uncertainties,” Patricia May Siy, company president and CEO, said.

Investors seemed happy about the news. On Monday, shares in PBCOM rallied 9.40%, bucking losses in the main index.

PBCOM is yet to release its full financial results but it said that net interest income went up at an annualized rate of 8.1% to P4.24 billion last year despite a low interest rate environment as a result of the central bank’s ultra-loose monetary policy.

What drove the growth was a 10.2% on-year expansion in loans and receivables to P63.5 billion, indicating a recovery in PBCOM’s lending business. This, in turn, prompted PBCOM to reduce its buffer funds against unpaid loans, a move that further boosted its earnings.

“We likewise believe that we have our non-performing loans (NPLs) under control as shown by reduced requirements for provisioning,” Siy said. NPLs are loans that remain unpaid 30 days past the due date.

Meanwhile, non-interest income “showed a decline” due to trading and rental income. The company did not disclose any figures.

Volume of deposits, considered a lifeline for banks, grew 3.8% year-on-year, thanks to an uptick in low-interest bearing deposits which expanded 30% annually and accounted for 60.4% of the bank’s deposit mix last year. — Ian Nicolas Cigaral