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PHILIPPINE National Bank (PNB) is interested in taking advantage of the provisions of the Financial Institutions Strategic Transfer Act (FIST) to clean up its balance sheet, an official said.
“As for the measure, that is still being determined, but yes, we are interested in selling or transferring our non-performing assets to take advantage of the capital gains,” said PNB Executive Vice President and CFO Nelson C. Reyes , in an online statement. briefing on Friday.
The bank is currently in the process of identifying eligible NPLs and assets that can be transferred to FIST corporations to be established pursuant to Republic Law No. 11523.
“Of course (Perhaps) the expectation is that the preliminary list of these identified eligible NPLs will be completed sometime during the second quarter, ”Reyes said, noting that they have begun to prepare even as the rules and regulations for implementing the new law are still in place. in progress. .
Enacted in February, the FIST Act allows lenders to sell their bad loans and assets to FIST corporations and also grants tax breaks for these transactions.
With many companies in trouble and borrowers with liquidity problems due to the crisis, officials hope that financial institutions can be encouraged to make loans once they have cleaned up their balance sheets through the FIST law.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno previously said the law could cut banks’ delinquency rate by 0.63 to 7 percentage points. The NPL ratio across the industry stood at 3.61% at the end of 2020.
Both the BSP and the Securities and Exchange Commission circulated a draft of the guidelines for comment from affected industries last month.
GNP’s NPL ratio stood at 6.93% at the end of 2020, according to its audited financial statement. PNB CEO and President José Arnulfo “Wick” A. Veloso said its restructured loans represented 7.5% of its loan portfolio last year.
He said they will reorient their activities going forward to respond to the changing business landscape caused by the pandemic, adding that they will prioritize critical sectors in the new normal.
“These include projects covered by the government’s ongoing infrastructure program that only focuses on supporting economic recovery efforts. Because next year is an election year, we expect increased government spending to drive the completion of these numerous infrastructure projects across the country, ”Veloso said.
He added that they are also interested in granting credit to industries dedicated to telecommunications, human health and social work activities, hospital activities, retail and supermarkets and the manufacture of food products.
GNP net income fell 73.14% to P2.6 billion in 2020 from P9.68 billion in 2019 due to increased provisions for bad loans during the pandemic.
Its shares closed at P23.25 each on Friday, five cents or 0.21% less than their previous close. – LWT Noble
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