Philippine Saving Bank (PSBank), the consumer and retail bank arm of the Metrobank Group, kept 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 capacity to meet its financial commitments relative to that of other Philippine corporates. 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 to remain unchanged in the next 12 months.
The ratings reflect PSBank’s strong market position, sound capitalization and prudent loan provisioning, strong Parent and highly-experienced management team.
PhilRatings’ ratings are based on available information and projections at the time that the rating review was performed. PhilRatings shall continuously monitor developments in relation to PSBank and may change the rating and Outlook at any time, should circumstances warrant a change.
Based on data from the Bangko Sentral ng Pilipinas (BSP), PSBank was the country’s second largest thrift bank, as of December 31, 2021. PSBank ended the year with total assets of P260.8 billion. The bank likewise ranked second in terms of deposits (P216.8 billion) and net loans (P111.5 billion), and ranked first in terms of capital (P33.5 billion).
PSBank closed the year 2021 with a net income of Php 1.5 billion, higher by 39 percent from previous year. The strong income performance was on the back of the increase in fee income by 22 percent, operating efficiencies which saw expenses decline by 3 percent, and the reduction in loan loss provisions owing largely to improved asset quality and effective collection efforts. Net non-performing loans ratio significantly dropped to 3.4 percent from 5.2 percent in 2020.
Total deposits grew 29 percent to P216.80 billion from P167.46 billion. Year-on-year, the bank saw loan applications increasing. As the economy opened up and pandemic alert levels downgraded, consumer loan demand started to pick up in the second half of 2021.
“Our financial performance in 2021 is a testament of 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 allowed us to be at the forefront of opportunities as they unfold,” PSBank President Jose Vicente L. Alde said.
Total assets closed higher by 19 percent to Php 261.81 billion from Php 219.41 billion a year ago. PSBank’s capital position was strong at P34.89 billion. Total Capital Adequacy and Common
Equity Tier 1 (CET1) Ratios improved significantly to 24.3 percent and 23.2 percent respectively, both above the statutory requirement set by the Bangko Sentral ng Pilipinas (BSP).
“The last two years of the pandemic have highlighted the importance of organizational flexibility. PSBank was able to harness the skills of its people and switch resources to business operations which need more attention, has higher demand or present new opportunities. Our digital transformation roadmap launched earlier than the pandemic allowed us to stay ahead of our customers’ requirements for non-contact banking. Relevant customer experience has remained at the center of what we do — true to the Bank’s core value of “Simple at Maaasahan,” President Alde added.
The bank is a significant player in the consumer banking sector. According to PSBank, it accounted for 44 percent and 21 percent share of the thrift banking sector’s auto loans and residential real estate loans, respectively as of end-2021.
PSBank has maintained a healthy capitalization. Capital Adequacy Ratio (CAR) stood at 24.3 percent as of end-December 2021, up from 19.4 percent in 2020, and exceeding the regulatory minimum.
As Gross Non-Performing Loans (NPL) ratio grew to 6.7 percent in 2020, from 3.6 percent in 2019, PSBank was proactive in its provisioning given the potential credit risks brought by the pandemic. Provision for impairment and credit losses expanded by 189 percent in 2020.
Gradual recovery from the effects of the pandemic resulted in improved asset quality for 2021. Gross NPL declined by 29 percent from the previous year while the Gross NPL ratio improved to 6.1 percent. Following better asset quality, PSBank reduced its provision for impairment and credit losses by 52 percent in 2021.
Metropolitan Bank and Trust Company (Metrobank) is the major shareholder of PSBank, with equity stake of 88.4 percent, as of December 31, 2021. Metrobank is a BSP-licensed universal bank, and was the Philippines’ third largest bank based on assets of P2.2 trillion, as of December 31, 2021. It similarly ranked third based on loans (P1.1 trillion), fourth in terms of deposits (P1.7 trillion), and second in terms of capital (P306.8 billion).
