By James A. Loyola
The profitability of Philippine Savings Bank (PSBank), the thrift banking arm of the Metrobank Group, is seen to continue to be driven by growth in its net interest income on the back of its expanding consumer loans portfolio.
According to Philippine Rating Services Corporation (PhilRatings), PSBank is considered a significant player in the domestic consumer market, with growth spurred by auto and mortgage loans.
Despite the significant decline in auto sales resulting from the implementation of the Tax Reform for Acceleration and Inclusion Act (TRAIN Law), PSBank managed to keep its market share of about 17.0 percent.
“Moderated, but still positive, growth is anticipated for the bank’s consumer loans portfolio in 2019,” said PhilRatings.
In line with the expansion of the bank’s loan portfolio, net interest income has been posting double-digit growth in the past years.
“Interest income, which is a more stable and recurring revenue source, will continue to drive operating income growth, going forward,” said PhilRatings.
Because of this and other factors, PSBank was assigned the top issuer rating of PRS Aaa (corp.) by PhilRatings.
An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within one year.
A company rated PRS Aaa (corp.) has a very strong capacity to meet its financial commitments relative to that of other Philippine corporates.
“The rating takes into consideration PSBank’s solid market position; its well-defined and forward-looking strategy; highly-experienced management; and continued growth in core interest income, attributable to loan portfolio expansion,” said PhilRatings.