PSBank profit drops 22% on higher provisions

Philippine Savings Bank (PSBank) reported a net income of P944 million in the first quarter of 2026, down 22 percent year on year, reflecting a cautious approach to risk amid geopolitical uncertainties and broader economic headwinds.

In a Friday disclosure to the stock exchange, the bank said earnings were tempered by higher loan provisioning, which rose 73 percent to P716 million as it strengthened buffers against potential credit risks stemming from the Middle East conflict’s impact on the Philippine economy.

The figure represents a roughly 22 percent decline from P1.21 billion in the same period last year. Other major Philippine banks also saw earnings growth moderated by heavier provisioning given the tighter financial conditions set by the energy shock in the first quarter of 2026. However, most still posted modest profit increases supported by loan growth and stronger core revenues.

Metrobank, PSBank’s parent bank, reported first-quarter net income of P12.6 billion, up about 2.4 percent year on year, as it maintained strong buffers, with its non-performing loan (NPL) coverage ratio at 137.1 percent while continuing to build reserves against potential risks.

BDO Unibank likewise said profit growth was “tempered by higher provisions.” The bank posted P20.1 billion in first-quarter net income, up only 2 percent from a year earlier despite double-digit loan growth, noting that it was building reserves as a “pre-emptive measure” amid evolving geopolitical risks.

Meanwhile, Bank of the Philippine Islands (BPI) booked P16.9 billion in first-quarter earnings, up 1.7 percent year on year, even as provisions surged 83 percent to P5.5 billion. The bank said higher provisioning and rising operating costs capped earnings growth despite strong lending activity.

Despite the year-on-year decline, PSBank said core operations remained steady, with net interest income rising 3 percent to P3.36 billion, supported by continued lending expansion. Total loans grew 3 percent year on year to P156 billion, driven by sustained demand across auto, mortgage, and small and medium enterprise (SME) segments.

On the funding side, deposits increased 4 percent to P177 billion, supported by ongoing deposit generation through both branch channels and digital onboarding platforms.

Asset quality improved slightly, with the NPL ratio easing to 3.6 percent as of end-March from 3.7 percent at end-2025, and remaining well below the thrift banking industry average of 6.4 percent.

“Notwithstanding the current market conditions, we remain committed to support our customers’ financial requirements through a balanced approach of disciplined risk management and strategic expansion,” said PSBank President Jose Vicente Alde.

The bank’s capital position remained strong, with total capital reaching P46 billion. Its capital adequacy ratio stood at 23.9 percent and common equity Tier 1 ratio at 22.9 percent—well above regulatory minimums and among the highest in the industry.

PSBank said these buffers position it to navigate ongoing market volatility while continuing to support customer financing needs.