PNB sees opportunities in banks’ de-risking

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The Philippine National Bank (PNB) said it considers the de-risking activities of foreign banks as an opportunity to expand its remittance business globally.

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“If they de-risk, that is an opportunity for PNB for being one of the top remittance companies in the Philippines,” PNB head of Treasury Horacio Cebrero 3rd said in a press briefing following the bank’s Annual Stockholders Meeting on Tuesday.

De-risking involves the closure of accounts of several money transfer operators by correspondent banks, who are seeking to limit their exposure to possible channels for money laundering.

“We view it that there is lot of opportunity when the foreign bank starts de-risking because the market sector that they are de-risking off will eventually flow/concentrate to us. We view it as a very big opportunity for PNB to tap into these markets,” Cebrerro said.

At present, PNB said the share of its remittance business to the bank’s income is at 10 percent on the average, while there are 70 PNB overseas offices worldwide.

Cebrero said the bank’s strategy is to continue the remittances business model of trying to make it more efficient for overseas Filipinos.

“One of the financial services is the Web Remit, which we are trying to further strengthen so that it will be more efficient for overseas Filipinos to remit their money back to the Philippines and were cost efficient for them,” he said.

In the first quarter of 2016, PNB more than doubled its net income from a year earlier on substantial improvements in its core and non-recurring revenues.

The bank’s net income totaled P2.6 billion in the first three months of 2016, surging 116 percent from P1.2 billion a year earlier as its core businesses continued to show progress.

Net interest income increased by 12 percent year-on-year, on the back of an 18-percent growth in loan portfolio and improvement in loan-to-deposit ratio at 71 percent from 69 percent.

Net service fees and commission income combined with net insurance premiums rose by 22 percent, driven mainly by increases in loan and trade transactions.

The bank also benefited from favorable market conditions, achieving a 50-percent growth in trading and foreign exchange gains.

Net gains from the sale of assets also grew substantially, following major disposals of foreclosed assets in line with the bank’s ongoing efforts to reduce non-earning assets.

Collections of non-performing assets increased the bank’s miscellaneous income.

As of end-March 2016, its total consolidated resources stood at P699.1 billion, up P78.5 billion or 12.6 percent.

The bank said it continued to improve its asset quality, with net non-performing loans (NPL) ratio slipping to 0.26 percent from 0.64 percent.

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