Sun Savings Bank’s total assets continued to grow significantly in the second quarter of 2022, reaching a new record high of 2.64 billion pesos, a growth rate of 27% from the level of 2, 07 billion from the previous year. The growth rate of 27% was significantly more than double that of the savings banking sector, which grew by 4.3% over the same period.
The growth in assets was again mainly driven by growth in its loan portfolio which increased by 34% to 1.96 billion compared to last year. Indeed, the bank continued to support Department of Education (DepEd) teachers for their expanded loan needs to rebuild or repair their homes damaged by Typhoon Odette (Rai).
The quality of the loan portfolio also showed a significant improvement, with the non-performing loan ratio, or NPL, nearly halving to just 1.8% from last year’s level of 3.4%. The bank continued to remain very liquid as its minimum liquidity ratio was 36.33%, more than double the ratio of 16% required by the BSP.
Funding this tremendous asset growth was the increase in savings and term deposits which rose 11% to 1.6 billion from a year ago. The bank continued to attract deposits by offering more remunerative rates for term deposits, in particular the five-year tax-free rate of 7% per annum and one-month term deposits (TD5). The tax-free rate of seven percent a year was at par with interest rates on taxable corporate bonds recently offered by large corporations like Ayala Land and Petron. Additionally, at seven percent a year, the TD5 rate was above the average inflation rate of 4.7 percent for the first seven months of 2022, protecting and enhancing the purchasing power of depositors’ hard-earned funds. .
It should also be noted that the Land Bank of the Philippines (LBP) and the DBP have been strong supporters of Sun Savings efforts to help DepEd teachers meet their financial needs. LBP granted the bank a term loan of 300 million pesos, followed by DBP which also granted a similar term loan of 200 million pesos, testimony to the soundness and good management of the bank, by the two largest universal banks in the country. These five-year term loans create a very stable funding base for the bank’s lending activities.
The growth in the total loan portfolio was reflected in net interest income after interest expense, which grew by 57% to a record level of P97 million compared to the same period last year. Consequently, net income after tax inevitably increased by 153% to P18.4 million compared to last year of only P8 million.
In the second half of the year, the bank expects total assets to continue to grow at a rapid pace, as demand for loans from Deped teachers is expected to remain high as face-to-face classes resume. Supporting the education of Filipino youth will continue to be a core government priority, as a young and educated population will translate into a demographic dividend in the years to come that will elevate the country to high-income status. DepEd teachers will continue to be highly valued by the government and their salaries and benefits are expected to increase in the years to come. By 2023, as required by the Salary Standardization Act, DepEd teachers at the starting level will receive a salary increase of P1,500 per month, increasing their gross monthly salary to P29,000. (PR)