Bobby De Ocampo-led Veterans Bank has worst bad loan portfolio

Bobby De Ocampo-led Veterans Bank has worst bad loan portfolio

Philippine Veterans Bank has the worst bad loan ratio among the country’s 45 big banks as soured loans surged by P1.11 billion to P4.69 billion last year.

By Eileen Mencias

According to data from the Bangko Sentral ng Pilipinas, PVB’s bad loans ratio increased to 19.32%, reflecting its failure to slash stressed assets. In 2019, its bad loans ratio was already at a high 13.07%.

PVB’s total loans rose by only P310.12 million to P24.46 billion.

The performance of banks is more easily gauged by its nonperforming loans ratio, or the amount of bad loans in relation to its total loans.

Bigger banks with assets worth over a trillion may report much bigger bad loans than PVB and still remain profitable.

PVB’s bad loans ratio of 19.32% means that its borrowers paid only about P1 peso of every P5 they loaned. As a result, PVB suffered huge losses.

The state-owned bank is led by its chairman and CEO, former finance secretary Roberto F. De Ocampo. Its vice chair is former Bureau of Internal Revenue commissioner Guillermo Parayno Jr. while its president and COO is Renato A. Claravall.

PVB’s biggest exposure is on consumer loans or community, social, and personal services loans which accounted for P9.1 billion of the total loans in 2019, followed by wholesale and retail trade loans amounting to P3.9 billion.

Given the increase in bad loans, PVB beefed up provisions against possible credit losses to P4.24 billion in 2020, more than double the P2.06 billion earmarked the year before.

PVB’s assets fell to P50.96 billion last year from P59.08 billion while its deposits decreased to P46.81 billion from P53.18 billion. tried but failed to get PVB’s comment.

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