Robinsons Bank profit climbs

Robinsons Bank Corp.’s consolidated net earnings surged in the first quarter on the back of higher operating income.

Based on its unaudited financial statement report posted on the Philippine Dealing System’s website, Robinsons Bank said the group booked P351.977 million in net earnings from January to March, up 778% from the P40.07 million recorded in the same period last year.

The bank attributed the increase in net profit to higher total operating income, which rose 65% to P1.67 billion in the first quarter from P1.01 billion a year ago.

Its net interest income hit P1.356 billion in those three months, up 61.8% from the P838.353 million seen in the same comparable period in 2019.

Interest earnings on loans and receivables climbed 20% to P1.682 billion from P1.401 billion a year ago as the bank’s loan portfolio expanded.

The Gokongwei-led bank’s nonperforming loans (NPL) ratio was at 0.85% as of end-March while its NPL cover hit 59.43%.

However, the bank said the growth in its earnings were partly offset by the 36% year-on-year increase in overall operating expenses which hit P1.25 billion.

The bank said the increase is largely attributable to business expansion activities and “significant increases in provision for credit losses which miscellaneous expenses, depreciation and amortization, information technology expenses, and insurance.”

Robinsons Bank recorded P128.5 billion in total assets as of March.

“The bank’s liquidity position is sufficient with liquid assets to total assets ratio of 15.8% as of March 31, 2020. The bank does not foresee any cash flow problems within the next 12 months and is not in default or breach of any form of indebtedness,” it said.

Its return on average equity hit 2.09% in the first quarter, down from 2.95% from a year ago, while the return on average assets also declined to 0.27% from 0.31% previously.

Robinsons Bank estimates capital expenditures to hit P877.7 million this year “mainly for branch expansion and implementation of IT-related projects,” which will be funded “out of cash flows from operations.”

Meanwhile, Robinsons Bank President and CEO Elfren Antonio S. Sarte said in a text message that the bank’s plan to launch its P10-billion bond program this year will be pushed back.

“We might consider issuing towards the fourth quarter depending on the economic conditions,” Mr. Sarte said.

The bank has set a P1-billion profit target for this year. It also wants to be upgraded to a universal bank and conduct an initial public offering by 2024. — Beatrice M. Laforga|BusinessWorld

Source: Peso Economics