Philippine National Bank, the fifth-largest lender in terms of assets controlled by airline and tobacco tycoon Lucio Tan, plans to put up a digital bank soon, in line with the Bangko Sentral ng Pilipinas’ push for digitization amid the global health crisis, a top executive said over the weekend.

PNB president and chief executive Jose Arnulfo Veloso said in an online briefing the bank is studying the establishment of a digital bank.

Veloso said he was not expecting the licensing for a digital bank to happen this year. “We have to finish our business plan first. The application is beyond our control. We focus first on the business plan, then we’ll work on selecting a partner,” Veloso said.

He earlier said that as the pandemic inevitably reshaped how businesses were conducted and transformed customer behavior, PNB would focus on exploring new opportunities, particularly in the digital space, that would translate into new revenue streams for the bank, while mitigating the risks arising from operating in the new normal.

Veloso said he was expecting the rollout of COVID-19 vaccines to enable the economy to rebound from a 9.5% contraction last year and eventually benefit the domestic banking industry.

PNB posted a 73-percent year-on-year decline in net profit in 2020 to P2.6 billion on loan loss provisioning. The bank ended 2020 with net profit before provisions for impairment and taxes of P17.6 billion, an increase of 17-percent year-on-year, driven by continued improvement on net interest income and robust trading gains.

PNB’s net interest income, comprising 79% of the total operating income, increased by 11% to P35.8 billion, supported by lower funding cost which cushioned the drop-in yield rates of earning assets.

Interest expense on deposits declined by almost half despite an 8-percent growth in deposits to P890.3 billion as the bulk of these incremental deposits continued to be in low-cost funds.

PNB booked P16.9 billion in provisions for credit losses, more than five times the year-ago level, as a pro-active approach in addressing potential delinquencies that may arise from the impact of the prolonged pandemic.

Manila Standard