Best for investment research in the Philippines 2023
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Best for investment research in the Philippines 2023

Philippine National Bank

Philippine National Bank, the nation’s first universal bank, did an impressive job last year of warning clients about threats to their portfolios and alerting them to opportunities for profit.

Acting president Florido Casuela’s institution is one of the largest privately owned Philippine commercial banks. Its principal activities are rather predictable: deposit-taking, lending, bills discounting, trade finance, foreign-exchange dealings, fund transfers, remittance servicing, asset management and the full range of retail and personal banking and trust services, and treasury operations.

It has more than 600 branches at home and 70 overseas units, across Asia, Europe, the Middle East and North America.

Less ordinary are PNB’s enviable investment research resources for its wealthy clientele.

In 2022, PNB’s private banking arm coordinated closely with the broader bank’s sprawling research divisions. Its analysts excelled with their top-line forecasts for the key economic drivers of the Philippines – GDP, inflation, central bank policy moves and exchange rate. These data form the core variable for the private bank’s macro investing guidance.

PNB analysts also offer best-in-class analysis on the fundamentals of publicly listed companies on the Philippine Stock Exchange to identify unconventional and unbiased investment calls.

Private bank clients get access to proprietary PNB thematic takes on wealth management, investment banking, securities trading, and trust activities. In 2022 alone, over 170 reports were circulated to clients covering economic and equity research and providing savvy investment ideas.

Many of the research division’s recommendations were ranked first or second based on the Bloomberg Absolute Return Rank throughout 2022. Moreover, PNB offered exhaustive pre-deal analysis for IPOs handled by its investment banking subsidiary, for the likes of Figaro Coffee Group, Citicore Energy Reit, Bank of Commerce and Vista Reit. Post-IPO research coverage offered regular updates on trading dynamics.

PNB is not afraid to make tough calls and predictions. For 2023, its research staff, for example, noted that the potential risk of continued high inflation and interest rate hikes may dampen the full recovery of the economy. Consequently, the quality of bank loans may be adversely affected by the combination of a slowing economy, high inflation and rising bond yields.

As such, the positive revenue impact from higher interest rates may be eroded by the resulting higher loan loss provisions. Banks will have to be most vigilant when it comes to loan exposure to corporates, particularly to the energy and energy-intensive sectors, and to small and medium-sized enterprises.

Amid such uncertainty, many banks may turn to increased efficiency to boost profits.

This year, PNB will implement a system for its retail lending that automates the application process from account solicitation to loan releases. The aim is to expand and strengthen the bank’s foothold in the retail and consumer segment and improve efficiency.

PNB is raising its digitalization game, too. Last year, the bank saw 77% growth in the user base for the PNB digital app platform. Of that, 47% were first-time digital users.

The app is generating healthy activity rates and the penetration rate of PNB’s eligible deposit base is increasing steadily, showing there’s still a lot of opportunity to pull private banking customers to the digital fold.

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