PNB to bolster core business with exit from Bahrain
Philippine National Bank’s (PNB) move to let go of its Bahrain operations and dissolve two of its units would allow it to cut costs and focus on expanding its core business, according to an analyst.
Ron Acoba, chief investment strategist at Trading Edge Consultancy, told the Inquirer PNB could still serve its Middle East market. This is mainly overseas Filipino workers sending money home, through a correspondent bank.
This, he said, would be more cost effective for the banking arm of the Lucio Tan Group.
PNB on Monday said in a regulatory filing its board of directors had approved plans to shutter its PNB Bahrain Representative Office, although this is still subject to regulatory approval.
PNB currently operates across 17 countries in North America, Europe, the Middle East and Asia. However, it recently noted that it was facing stiff competition from banks and nonbanks in these locations.
“To maintain its market position in the industry, the bank offers diverse products and services, invests in technology, leverages on the synergies with the Lucio Tan Group of Companies and builds on relationships with the bank’s other key customers,” PNB said in its annual report.
At the same time, PNB’s board has decided to dissolve the bank’s consumer finance and enterprise services sectors.
“[This] will allow [PNB] to focus on expanding its consumer lending business,” Acoba said in a text message.
In the first semester, PNB benefited from higher demand for loans, resulting in a 22-percent surge in earnings to P12.5 billion.
Its net interest income had climbed by 7 percent to P25.8 billion.
Loans and investments securities grew by 5 percent and 11 percent, respectively.
To stand out among their competitors, PNB president and CEO Edwin Bautista earlier said they were looking to “unlock new revenue streams” to boost the bank’s net income through exploring the use of technology, such as data science and artificial intelligence, in its businesses.
