PBCom Q1 profit falls as operating expenses increase

PHILIPPINE BANK of Communications’ (PBCom) net income fell 4.7% to P472.94 million in the first quarter from a year earlier due to higher operating expenses and declining trading performance.

“This is attributable to P123.6-million higher operating expense and the P106.4-million decline in the trading performance, partially offset by the P187-million improvement in net interest income,” it said in a stock exchange filing on Tuesday.

This translated to a return on average equity of 9.68% and a return on average assets of 1.19%, up from last year’s 11.13% and 1.36%.

PBCom’s net interest income rose 14.7% to 1.46 billion from a year earlier.

“To fund this growth, deposit volume increased, and the group issued bonds payable at the latter part of 2024, which resulted interest expense that was higher by P66 million,” it said.

Operating expenses rose 13.18% to P1.06 billion, mainly driven by provisions for impairment losses, volume-driven and manpower costs and depreciation and amortization, which all increased. Operating income stood rose 7.9% to P1.73 billion

Net interest margin inched up to 4.05% at end-March from 4.02% at end-2024 due to lower cost of funds.

Total loans and receivables dropped 1.8% to P99.48 billion from end-2024. The group’s gross bad loan ratio was 3.59%, 0.93 point  higher than the ratio at the end of 2024, PBCom said.

On the funding side, deposits fell 5.34% year on year to P8.43 billion, while assets rose 2.7% to P161.11 billion from end-December. Total equity rose 3.13% to P19.84 billion from a quarter earlier.

The bank’s capital adequacy ratio fell to 15.75% from 16.84%, “mainly due to higher total risk weighted assets, offset by higher total qualifying capital.” This was still above the 10% minimum threshold.

PBCom’s liquidity ratio rose to 22.91% from 18.54% at end-December.

The bank had 90 regular branches, four branch-lite units and 166 automated teller machines as of March 31. — Aubrey Rose A. Inosante