For the six-month period ended 31st December, the bank recorded a profit after tax of P326.9 million, almost a quarter down on the P425 million accumulated in the previous corresponding period.
The decline is attributed to pressure on top-line revenue and increased credit provisioning to provide for the effects of Covid-19.
The bank says the December 2019 results were within the expected parameters given the prevailing operating environment.
It, however, says the overwhelming impact on the December 2020 results was the difficult trading environment created by Covid-19, which the banking industry as a whole continues to navigate.
During the period under review, the FNBB impairment charge increased by 16 percent year-on-year with a charge of P199 million.
This is said to be largely due to an increase in impairments in the tourism and transport industries.
However, the bank states that it continues to provide prudently for the expected downward pressure on customer risk profiles and realizable collateral values in the overall context of Covid-19.
According to the bank’s Chief Executive Officer, Steven Bogatsu, the pandemic has presented itself as a real and severe economic test.
“FNBB has shown that its income streams are resilient while a key focus has been on strengthening the balance sheet,” said Bogatsu.
Given the current uncertainty surrounding the rollout and impact of the Covid-19 vaccine and the second wave of infection being experienced across the world, Bogatsu says they expect 2021 will continue in a state of overall uncertainty.
“We anticipate that pressures on discretionary household income will be sustained and that businesses will defer capital expenditure to conserve cash reserves pending stronger signs of imminent recovery,” he stated.
In addition, with credit default pressure rates mounting despite low-interest rates, Bogatsu says the operating environment for financial services is likely to remain challenging.