HEIGHTENED loan-loss provision and higher operating expenses shrunk the net income of the Development Bank of the Philippines (DBP) by 30 percent last year.
DBP Executive Vice President for Corporate Services Marietta M. Fondevilla said in a statement on Thursday that the state-owned bank’s profits reached P3.9 billion last year, which is lower than the P5.60 billion it booked in 2019.
Still, Fondevilla noted that gross margin as of end-December 2020 improved by 5 percent to P20.91 billion from P19.9 billion year-on-year.
“DBP’s financial standing mirrors the general trend in the industry as majority of the banks amplified actions in ensuring ample reserves to cover probable losses as a result of dwindling economic activity,” she added Fondevilla, who is also concurrent head of operations of the DBP.
DBP President and CEO Emmanuel G. Herbosa shared that the bank’s total assets stood at P1.04 trillion as of end-2020. This shows a 37-percent surge from P761.24 billion in 2019.
Herbosa attributed the now 1 trillion-peso bank’s achievement to the double-digit growth in deposits and investments.
DBP registered deposits of P817.9 billion in 2020, which is 47.6-percent higher than P554.18 billion in 2019. Investments soared by 26 percent to P260.1 billion for the period from P206.57 billion year-on-year.
“DBP’s latest milestone manifests the public’s continued confidence in DBP as a strong, stable and reliable financial institution,” Herbosa said. “We are emboldened by the fact that the bank was able to achieve this feat two years earlier than our projected timeline and despite the constraints of the prevailing public health crisis.”
Last year, the bank’s loan portfolio grew by 19 percent to P423.32 billion from P356.75 billion in 2019. Majority of the lending funds were extended to critical sectors and industries severely impacted by the pandemic-induced economic slump, Herbosa said.
Bulk or 53.4 percent of the borrowings, amounting to P225.9 billion, went to infrastructure and logistics. Meanwhile, the bank provided loans to social services and community development amounting to P78.9 billion; environmental projects, P44.8-billion; and micro, small and medium enterprises (MSMEs), P32.8-billion.
“We remain committed to the collective and purposive efforts of the National Government to bolster resiliency and carve a steady path to recovery and growth especially of our traditional customer segments,” Herbosa said. The bank last month sought to increase its authorized capital to P100 billion to boost borrowing funds for pandemic-hit sectors. This is nearly triple its current P35 billion in the books.
This year, DBP is eyeing to finance P314.547-billion worth of loans to key sectors, including the infrastructure and logistics sector; social services; and environmental projects such as renewable energy resources, public water systems and waste management, among others.
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