PBB looking to get universal bank license by 2024 or 2025

By Keisha B. Ta-asan, Reporter

PHILIPPINE BUSINESS Bank, Inc. (PBB) is aiming to obtain a universal banking license from the Bangko Sentral ng Pilipinas (BSP) by 2024 or 2025, the lender said. 

The bank also plans to expand its distribution channels to provide more products and services to its clients, particularly to small and medium enterprises (SMEs), amid challenging economic conditions this year.

The Yao-led bank said in an e-mail to ����ý that it recently increased its capital in compliance with the BSP’s minimum requirement for a universal bank license.

“The capital increase brings the bank closer to its aspiration to be a universal bank. Being a universal bank will allow PBB to grow its product and services suite and develop fee-based revenue streams,” the lender said.

“All else equal, the bank will likely reach the P20-billion capitalization requirement to be a unibank by 2024 or 2025. While PBB has long been vocal about its unibank aspirations, it will remain focused on servicing the financial needs of the country’s small and medium entrepreneurs,” it said.

PBB last month said its board of directors has approved to raise the bank’s authorized capital to P15 billion from P10 billion.

Members of the board approved the bigger capital stock by adding 1.37 billion common shares priced at P10 apiece, from 870 million common shares priced at the same amount. Meanwhile, preferred shares will remain steady at 130 million.

It is also looking to raise P500 million from a stock rights offer.

“The increase in capital will also allow the bank to provide more loans to clients, expand its investment portfolio, and take on more funding from depositors,” PBB said.

“The bank will also launch a number of infrastructure projects that will make PBB’s distribution channels for its products and services more accessible to its clients,” it said.

PBB said it is also looking to expand its banking books and take on more risk assets like loans and investments, should market conditions allow.

Asked about their outlook for this year, PBB said their financial performance would depend on the economic conditions of the country.

“The bank has been very mindful of the increase in interest rates, taking great care in updating clients of the macroeconomic conditions in the country and how these developments will affect the banking industry and the clients’ financing requirements,” PBB said.

“For 2023, loan growth will be tempered if interest rates continue to increase. On the other hand, a stable interest rate environment will likely spur demand for more investments,” it said. 

The central bank raised its policy rate by 350 basis points to a 14-year high of 5.5% in 2022 and is expected to continue tightening in the first half of this year.

“From a relationship management standpoint, the bank will continue what it has been doing the past years: understanding the needs of its SME clients and providing products that service its clients’ financial requirements,” PBB said.

“A deep appreciation of its clients’ respective businesses means the bank is able to provide customized financial solutions that are appropriate for its clients’ needs,” PBB added.

PBB’s net income stood at P306.280 million in the third quarter of 2022, up by 9.3% from the P280.294 million posted in the same quarter a year prior, amid higher earnings from its core businesses and an expansion in its loan portfolio.

For the first nine months of 2022, the lender’s net profit climbed to P926.6 million from the P804.3 million posted in the same period a year ago. This translated to a return on equity of 8.82% and a return on assets of 0.99%.

PBB’s loans and other receivables rose by 14.7% to P98 billion as of end-September from P85.4 billion a year earlier.

On the funding side, deposit liabilities inched up by 2.4% to P105.6 billion as of end-September from the P103.1 billion recorded in the same period in 2021.

Meanwhile, its total resources as of September 2022 reached P125 billion.

The Yao-led bank’s shares went down by 3.85% or 40 centavos to close at P10 each on Wednesday.