PHILIPPINE National Bank (PNB) wants to double its return on equity (RoE) within three years as it plans to put more focus on consumer finance and upgrade its subsidiaries in the coming years.
In a media briefing late Tuesday, PNB President and CEO Jose Arnulfo A. Veloso said the bank wants to increase its RoE to seven percent by the end of 2019 and to 12% in a span of three years from the six percent recorded at end-June.
“Our CFO and head of strategy are confident that we can hit seven percent. Seven percent…by the end of the year. The highest in the industry is 10%… I know 10% is really a stretch but…as far as I’m concerned, I’m telling them 12% is your target, shoot for the stars and land on the moon,” Mr. Veloso told reporters in a mix of English and Filipino.
RoE is the ratio of net profit to average capital. It measures how much shareholders make for every peso they invested in a company.
PNB’s quarterly report said its RoE was at 6.04% in the second quarter, lower than the 8.89% posted in the same period last year and the 7.70% in December 2018.
PNB is also looking to improve the leasing businesses of its subsidiaries, with Mr. Veloso saying there is huge untapped potential in the sector.
“Now is the time where I’m also focusing on the subsidiaries. So naka-focus ako ngayon sa leasing, ang laki pala ng opportunity natin dito sa leasing di natin ginagawa… Ang daming pumapasok sa leasing na hindi nacu-cultivate (I’m now focused on leasing. There’s a huge opportunity there. Many enter the leasing business but fail to cultivate it),” he said.
Mr. Veloso said PNB focused on improving its communication strategies in the first quarter, while the second quarter revolved around “understanding the rest of the operations of the branches.”
He added that PNB is currently building a team focused on understanding data.
“Data is going to be an important part of how we can do our business altogether… The consumer finance business, if done scientifically, is actually a data-reading business disguised as a lending institution,” he explained.
The bank chief likewise said the lender will also focus on wealth management amid the growing number of Filipinos interested in savings accounts.
The bank posted a P2.067-billion net profit in the second quarter, lower than the P3.974 billion booked in the same period last year.
PNB shares closed at P47.85 apiece on Wednesday, up five centavos or 0.10%. — Beatrice M. Laforga