The Philippine National Bank, the sixth-largest lender in terms of assets and controlled by tycoon Lucio Tan, plans to sustain a double-digit growth in net profit this year on the back of the country’s robust domestic economy and the government’s implementation of big-ticket infrastructure projects.
“We see a mid-teen growth in net income this year as there are a lot of opportunities in trading activities. We also want to take advantage of the government’s plan to implement infrastructure projects under its ‘golden age’ infrastructure plan,” PNB executive vice president for the treasury group Horacio Cebrero III said in a briefing Tuesday.
Cebrero said the bank was aiming to expand total loan portfolio this year by 14 percent to 15 percent. He said PNB’s lending growth would be in line with the industry’s loan expansion.
Cebrero said corporate loans comprised the bulk or around 55 percent of the bank’s total loan portfolio, with 35 percent accounted by consumer lending and the balance by loans to local government units, especially in the countryside.
Cebrero said lending to the small and medium enterprises would be expanded, taking advantage of around 5,000 workforce in its branches nationwide.
However, he said the bank would be facing an array of challenges that might impact on its growth trajectory, such as the impending two more rate hikes by the US Federal Reserve this year, and geopolitical concerns within and outside the region.
Cebrero said the bank would continue to issue long-term negotiable certificates of time deposits amid the sufficient supply of liquidity in the domestic market.
The bank in December 2016 issued P5.5 billion worth of LTNCDs. Cebrero said the issuance of LTNCDs would be for the liquidity management purposes of the bank and to fund future growth.
He said the bank would remain open for partnerships in the future “if these present opportunities to speed up growth in the SME sector,” which is one of its main target markets.
PNB’s net income in 2016 jumped 14 percent to P7.2 billion from P6.3 billion in 2015, driven by a steady improvement in core businesses.
The bank’s net interest income grew 11 percent to P19.6 billion, accounting for nearly two-thirds of total operating income.