PHILIPPINE Business Bank (PBB) posted a higher net profit in the second quarter, backed by stronger core income and trading gains.
The lender's net income climbed 22.1% to P400.45 million in the April to June period from the P327.893 million booked a year ago, its quarterly report showed.
This brought the bank's first-half net income to P794.9 million, increasing by 37.3% from the P578.9 million in the prior year.
PBB boosted its loan loss reserves to P400 million in the second quarter against the P75 million set aside in the same period in 2019. Total loan provisioning for the first six months ballooned to P550 million from the P150 million in January to June 2019.
"As a result of a thorough portfolio management and review processes of the Bank, PBB deemed it prudent to provide P550 million in loan loss reserves for the first half of 2020… Even as market conditions continue to be challenging, our good balance sheet position allowed us to deliver robust core income and PTPP (pre-tax pre-provision) numbers," Roland R. Avante, president and CEO of Philippine Business Bank, was quoted as saying in a statement.
"PBB understands the critical role that the banking industry plays in our economy. Providing liquidity to our SME (small and medium enterprises) partner-clients via well-structured financing is a key driver in jumpstarting the economy. PBB remains committed to being a catalyst in the nation's economic development as the bank of choice of the SMEs as the bank understands the opportunities present in some business sectors despite the COVID-19 (coronavirus disease 2019) [pandemic]," he added.
The bank's net interest income climbed 39.4% to P1.39 billion in the second quarter from P998 million a year ago. This, as income from loans and other receivables rose 3.6% year on year to P1.655 billion, while earnings from investments and trading securities surged 76.4% to P128.8 million.
Non-interest expenses inched up 4.8% to P762.5 million due to higher salaries and other benefits paired with bigger costs for management, other professional fees as well as insurance expenses.
Meanwhile, the bank's trading gains more than doubled to P259.56 million in the quarter from P114.75 million a year ago.
PBB's core income surged 90.7% to P678.6 million last quarter from P355.88 million a year ago.
Its loans and other receivables totalled P84.35 billion as of June. Bad loans reached P2.63 billion, bringing its non-performing loan ratio to 3.09% at end-June from 2.33% at end-2019. Meanwhile, deposits stood at P95.05 billion. The bank's loan-to-deposit ratio was at 88.74% in the quarter.
PBB's assets stood at P114.84 billion at end-June while equity reached P14.04 billion.
The bank's capital adequacy ratio was at 14.31%, well above the central bank's required minimum.
PBB's shares closed at P8 apiece on Thursday, unchanged from its previous close.