PHILIPPINE NATIONAL Bank (PNB) will reduce its exposures to some sectors to help reduce emerging risks due to the coronavirus crisis.

Officials also said the bank has beefed up liquidity early in the crisis, noting its standing remains stable.

“In order to mitigate the risk in the bank’s portfolio, we will reduce exposures, some of them we’ve already reduced (those) for vulnerable sectors,” PNB President and Chief Executive Officer Jose Arnulfo A. Veloso said during the bank’s annual stockholders’ meeting held online on Tuesday.

“For those that we can restructure, we will [restructure]…and then, more emphasis is given on returns over risk-weighted assets rather than simple asset growth,” he added.

Mr. Veloso said the bank has less than 10% exposure to certain vulnerable sectors. He said they have been engaged in dialogue to gauge how to assist their borrowers during this crisis.

“We will refocus new loan grants to essential sectors and industries critical to function during ECQ (enhanced community quarantine) as well as those that will try in the new normal,” Mr. Veloso said.

In the first quarter, the bank set aside P3.4 billion for loan loss provisions, higher than the P346 million logged in the same period last year.

“For the rest of the year, the need for additional provisioning will depend if there are continued significant changes in the economic scenarios and the macroeconomic factors…or if there will be actual delinquencies that actually may happen,” PNB Chief Financial Officer Nelson C. Reyes said.

Mr. Reyes said the bank has been watching out for liquidity risks since the onset of the crisis.

“The bank has already taken proactive measures to build up its liquidity via enhanced deposit drive and selected asset buildup which is focused on high-quality loans,” he said.

Mr. Reyes also said PNB is closely watching their liquidity indicators as well as systemic risks.

He noted the bank has enough buffers, with its capital adequacy ratio at 14.7% and common equity Tier 1 ratio at 13.8% as of March.

Moving forward, Mr. Veloso said the bank will fast-track their digital initiatives as social distancing measures boosted the need for online banking.

“I am happy to report to you that our mobile banking portal registered 3.1 million transactions in the month of May, [up] 25% from April,” he said.

The Tan-led lender’s net income slid 29.7% year on year to P1.3 billion in the January to March period.

PNB’s shares closed at P21.10 apiece on Tuesday, up by 10 centavos or by 0.48% from the previous day. — Luz Wendy T. Noble