PBCOM reports record-high profits in 2021 as the loan business returns

by Janine Mayers · Published August 11, 2022 · Updated February 13, 2024

2 May 2022

Philippine Bank of Communications (PBCOM) posted “record high” profits last year as its main lending business recovers despite the lifting of pandemic restrictions.

PBCOM, which just got a universal banking license, Also PBCOM reports its consolidated net income increased 34.6 percent year over year to P1.57 billion in 2021 in a filing to the stock exchange on Monday.

According to the corporation, it was the biggest bottom-line since the Lucio Co Group joined in 2014. “Improved performance of its core business and normalized provision for credit losses,” PBCOM said in explaining its financial performance.

“Despite market uncertainty, the Bank’s focus on core activities, such as corporate lending and the development of low-cost deposits, has given the Bank with a constant income,” said Patricia May Siy, president and CEO.

The news seemed to please investors. PBCOM reports the shares rose 9.40 percent on Monday, outperforming the main index.

PBCOM has yet to reveal its full financial figures, but it noted that despite low interest rates, net interest income increased by 8.1 percent to P4.24 billion last year as a result of the central bank’s ultra-loose monetary policy.

The gain was fueled by a 10.2% year-on-year increase in loans and receivables to P63.5 billion, demonstrating that PBCOM’s lending business is on the mend. As a result, PBCOM reduced its buffer funds against defaulted loans, which raised its earnings even more.

“We also feel we have our non-performing loans (NPLs) under control, as evidenced by lower provisioning requirements,” Siy said. NPLs are loans that have been unpaid for 30 days or more.

Non-interest revenue, on the other hand, “showed a decline” due to trade and rental income. The firm did not provide any figures.

Deposit volume increased 3.8 percent year over year, owing to an increase in low-interest bearing deposits, which increased 30 percent annually and accounted for 60.4 percent of the bank’s deposit mix last year.