Philippine Saving Bank (PSBank), the consumer and retail banking arm of Metrobank Group, has retained its issuer credit rating of PRS Aaa, with a stable outlook, from the Philippine Rating Services Corporation (PhilRatings).
A company rated PRS Aaa has a very strong ability to meet its financial commitments compared to that of other Philippine companies. PRS Aaa (corp.) is the highest issuer credit rating assigned by PhilRatings.
A stable outlook, on the other hand, is assigned when a rating is likely to be maintained or remain unchanged over the next 12 months.
The ratings reflect PSBank’s strong market position, strong capitalization and prudent loan provisioning, strong parent company and highly experienced management team.
PhilRatings ratings are based on information and projections available at the time the ratings review was conducted. PhilRatings will continuously monitor developments relating to PSBank and may change the rating and outlook at any time, should circumstances warrant a change.
Based on Bangko Sentral ng Pilipinas (BSP) data, PSBank was the second largest savings bank in the country, as of December 31, 2021. PSBank ended the year with total assets of 260.8 billion pesos. The bank also ranked second in terms of deposits (216.8 billion pula) and net loans (111.5 billion pula), and first in terms of capital (33.5 billion pula). ).
PSBank ended 2021 with a net income of Php 1.5 billion, up 39% from the previous year. The strong revenue performance was driven by higher fee income of 22%, operational efficiencies which led to lower expenses of 3% and lower loan loss provisions, largely due to the improving the quality of assets and the effectiveness of collection efforts. The net non-performing loan ratio fell significantly to 3.4% from 5.2% in 2020.
Total deposits increased by 29% to reach 216.80 billion pesos against 167.46 billion pesos. From year to year, the bank has seen loan applications increase. With the economy opening up and pandemic alert levels falling, demand for consumer loans began to pick up in the second half of 2021.
“Our financial performance in 2021 is a testament to the strength of the Bank’s balance sheet and the agility of the organization to quickly adapt to volatile market conditions. Our early and proactive efforts to adjust our strategies and operations have allowed us to be at the forefront of opportunities as they arise,” said PSBank Chairman Jose Vicente L. Aldus.
Total assets closed up 19% at Php261.81 billion from Php219.41 billion a year ago. PSBank’s capital position was strong at 34.89 billion pesos. Total capital adequacy and pooled funds
Tier 1 (CET1) capital ratios improved significantly to reach 24.3% and 23.2% respectively, both above the legal requirement set by the Bangko Sentral ng Pilipinas (BSP).
“The last two years of the pandemic have highlighted the importance of organizational flexibility. PSBank has been able to harness the skills of its staff and redirect its resources to business operations that need more attention, are in higher demand, or present new opportunities. Our digital transformation roadmap launched before the pandemic has enabled us to stay ahead of our customers’ requirements for contactless banking. Relevant customer experience has remained central to what we do – true to the Bank’s core value of ‘Simple to Maaasahan’, added Chairman Alde.
The bank is an important player in the consumer banking sector. According to PSBank, it accounted for 44% and 21%, respectively, of car loans and residential real estate loans in the savings banking sector at the end of 2021.
PSBank maintained healthy capitalization. The capital adequacy ratio (CAR) stood at 24.3% at the end of December 2021, compared to 19.4% in 2020, and exceeding the regulatory minimum.
While the Gross Non-Performing Loans (GNL) ratio increased to 6.7% in 2020 from 3.6% in 2019, PSBank has been proactive in its provisioning given the potential credit risks induced by the pandemic. The provision for impairment and credit losses increased by 189% in 2020.
Gradual recovery from the effects of the pandemic has led to improved asset quality for 2021. Gross NPLs decreased by 29% year-on-year, while the gross NPL ratio improved to 6 .1%. Following improved asset quality, PSBank reduced its provision for impairment and credit losses by 52% in 2021.
Metropolitan Bank and Trust Company (Metrobank) is the largest shareholder of PSBank, with an 88.4% stake, as of December 31, 2021. Metrobank is a BSP-licensed universal bank and was the third largest bank in the Philippines based on assets of 2 .2 trillion pesos, as of December 31, 2021. It also ranked third in terms of loans (1.1 trillion pesos), fourth in terms of deposits (1.7 trillion pesos) and second in terms of capital (306.8 billion pesos).