PHILIPPINE National Bank (PNB) intends to grow its net income by 13-14% this year on the back of the continued expansion of its core businesses.
PNB Chief Financial Officer (CFO) Nelson C. Reyes said the lender aims to grow its bottom line by 13-14%.
“We’re trying to grow our deposit and loans as well as our fees and commissions,” Mr. Reyes told reporters following PNB’s annual stockholders meeting yesterday.
Mr. Reyes added that the Lucio C. Tan-controlled lender aims to grow its commercial and consumer loans this year, veering away from its corporate borrowing portfolio.
“We’re shifting [our focus] to commercial and consumer [loans]. One of the reasons for that is to diversify the risk. Second [is for] higher margins.”
“We hope to increase our commercial loans by 38% [from the current 34%]. And then the consumer [loans right now is at] 10%. We plan to improve it to 12-13%,” Mr. Reyes added, noting that PNB’s commercial loans were comprised of borrowing by mid-sized businesses.
Currently, the bulk of PNB’s loan portfolio comes from the corporate segment with a 52% share.
The lender’s CFO added that the bank’s target of better earnings will be supported by the country’s economic fundamentals to be spurred by the development of areas outside Metro Manila.
“It’s also brought about by economic fundamentals. A lot of growth right now in the country is coming from the provincial areas, specifically in [Visayas and] Mindanao. We’re well placed to grow our portfolio there,” Mr. Reyes said.
PNB had 635 branches at end-2017, with two-thirds of which located outside the country’s capital.
Last week, PNB raised $300 million in fixed-rate senior notes under the first tranche of the bank’s euro medium term note (MTN) program, marking the maiden drawdown from its $1-billion program.
Mr. Reyes said proceeds from the capital raising activity will be used for its “US dollar loans.”
“So we already have identified a pipeline for those us dollar loans which we intend to deploy in the coming months,” he said.
Moody’s Investors Service has assigned an investment-grade rating to PNB’s note issuance, matching the Baa2 rating of the Philippine government.
PNB is the fifth-biggest bank in terms of assets as of 2017. The bank booked an P8.2-billion net profit in 2017, up 14%, supported by strong growth in its core operating income.
PNB shares closed at P52.90 each on Tuesday, down 70 centavos or 1.31%. — Karl Angelo N. Vidal