PNB, RSB, Security Bank buck trend of poor Q1 profits

MANILA, Philippines - Three local banks on Thursday reported healthy first quarter earnings, bucking an industry-wide malaise of depressed profits due to poor treasury gains. However, the Metropolitan Bank & Trust Co., the country’s largest in terms of assets in 2007, could not claim it was immune, reporting that its net income for the first three months of the year plunged by 15.64% to P1.76 billion from P2.08 billion a year ago. Trading and forex gains contracted by 58.76% to P853.46 million. "The continued global risk aversion and rising domestic interest rates on the heels of higher inflation expectations have made trading and investment difficult compared to last year," said Ferdinand Antonio Tansingco, Metrobank treasurer, in a statement. Interest income was down by 4.26% at P4.97 billion, while non-interest income was up by 26.97% to P4.94 billion. Accounting for the surge in non-interest income were higher bank fees and service charges, gains from sold assets, and a four-fold rise in miscellaneous income. On the other hand, the Philippine National Bank, controlled by tobacco magnate Lucio Tan, said its net income surged to P457 million in the first three months of the year, for a 48% increase over the P308 million it notched during the same period last year. RCBC Savings Bank (RSB), the thrift bank arm of Rizal Commercial Banking Corp. (RCBC), said net income accelerated by 15% to P212 million from P184 million a year ago. And finally, Security Bank Corp. said net income rose by P78.1 million from a year ago to P835.7 million. PNB, in a statement, said consumer loans rose by 25% over end-2007 level to total P3.3 billion, while its foreign exchange gains grew by 136% to P571 million from P242 million. "Total deposits closed firm at P180 billion," it added. Its capital adequacy ratio (CAR), a measure of financial strength, "remained formidable at 18.51%," higher than the central bank’s requirement of 10%. RSB, on the other hand, also said its net income growth was driven by higher loans and deposits. Total loan porfolio grew by 12% to P30.1 billion from P26.9 billion, on the back of consumer loans, which grew by 14%. Current and savings account deposits amounted to P11 billion, up from P9.1 billion while foreign currency deposit unit (FCDU) deposits rose to $101.1 million, similarly up from $89.5 million last year. Its ratios also improved: its CAR grew to 15% from 10.2%, while its non-performing loan ratio dipped to 4.9% from 5.4%. Similarly, an increase in loans was the reason for Security Bank’s positive performance in the first quarter. Net interest income stood at P1.1 billion, "slightly higher" year-on-year, on the back of a surge in loans by some 43% to P48.1 billion. Its other income totaled P1.2 billion, P113 million higher than a year ago. "Although securities trading gains dipped by 12.3% to P630.1 million, increases in foreign exchange gains and service charges contributed to the positive growth," the bank said. PNB, currently sixth largest in terms of assets in 2007, is slated to become the country’s fourth largest in terms of assets when its merger with Allied Banking Corp., also controlled by Mr. Tan, is completed. The merger was greenlighted by the two banks’s respective boards in April, but is still subject to approvals by shareholders and regulators. RSB President Lope M. Fernandez said he was "proud" of RSB’s first quarter performance but was, at the same time, "concerned" about the impact of rising prices on the bank’s business operations. Last week, RCBC reported it earned P773 million in the first quarter, 6.6% less than the P828 milion it earned in the same period ago, joining other banks such as the Bank of the Philippine Islands and Banco de Oro Unibank that have been hit by poor securities trading gains. - BusinessWorld