MANILA, Philippines - Philippine Business Bank (PBB) registered a 68-percent drop in net earnings to P258 million in the first six months of 2014 due to higher spending for branch expansion and lower trading gains.
In a statement, PBB president and chief executive officer Rolando R. Avante said costs and expenses incurred for their branch network expansion impacted on earnings.
“The bank’s network expansion program will continue until such time that the presence of Philippine Business Bank is felt throughout the key cities, municipalities, and business centers throughout the country. We remain committed to our goal of strengthening our reputation as the bank of choice for the SME (small and medium enterprise) market,” he said.
Meanwhile, core income, composed of net interest income and fee-based income, increased 34 percent to P1.134 billion from P847 million in the same period last year.
Net interest income rose 42 percent to P1.07 billion in the first semester of 2014 from P754 million in the same period last year. Quarter-on-quarter, it grew six percent to P551 million in the April to June period from P520 million in the first quarter.
Loan portfolio also expanded as demand from the SME market remained strong in the first half of 2014.
As anticipated, the volatility in the capital markets coupled with expectations of a rate hike dampened PBB’s treasury earnings in 2014.
“A key income driver for the past five years, trading gains were tempered in the first half as the bank took a neutral position in its trading portfolio,” the bank executive said.
The bank’s network expansion progressed with 108 operating branches nationwide, almost double from 2010’s yearend total of 55 branches.
Our branch network will serve as the backbone of the sustained growth in our deposit-taking and lending business, and will continue to be a key driver of our profitability in the coming years,” Avante said.
PBB’s net income for the whole of 2013 stood at P1.1 billion.
PBB is a part of the AMY Group of Alfredo M. Yao, the owner of the Zest-O line of fruit juices. Other members of the group are Air Asia Zest, Amchem Marketing Inc., Semexco Marketing Inc.,; Solmac Marketing Inc. and Uni-Ipel Industries Inc..