While NRBSL’s financial performance in 2021 is not expected to be significantly better than last year, it cannot be comparatively inferior even though economic recovery is not yet firmly in place. The second year of the pandemic tested anew the soundness of NRBSL’s financial fundamentals and it proved once more the Bank’s ability to avoid major contraction in its resources or shortfall in revenue generation. Despite the incapacity of a number of loan clients, collection efforts resulted to an increase in net interest income by P11.3 million to reach P86.9 million while non-interest income grew by P1.2 million and settled at P74.3 million by the end of 2021. From these profits, a substantial amount of P18.3 million was allocated for loan-loss provisioning which is two times bigger than the previous year. The Bank is able to balance its financial objectives to remain profitable and the prudence to undertake financial protection when needed.

   The reduction in the level of liquidity was a result of an operational assessment. The Bank always gives preference to liquidity over profitability but maintaining a level of liquid assets far beyond operational and contingency funding requirements comes with unnecessary cost. The decision to reduce liquidity is reached within this context and without any compromise of the Bank’s commitment to maintain adequate cash reserves.

   The entire banking sector demonstrated credit risk aversion in 2021 arising from deterioration of asset quality as the economy tries to crawl its way back to recovery. This behavior is also exhibited by NRBSL as there were episodes in the course time that the Bank experienced drop in overall credit portfolio. This loss aversion is managed accordingly as NRBSL is keen on its goal to keep its loans outstanding at least at the same level of the previous period. Not to be denied, the Bank closed the year with its gross loan portfolio at P1.119 billion or less than a million short compared to 2020. The Bank’s performance in deposit build-up for 2021 with positive variance of P116.2 million has duplicated the previous year’s performance of P111.3 million net increase. For two years in a row, NRBSL’s deposits increased by leaps and bounds posting an unprecedented jump of 30% reckoned from its level in 2019.

   The modest profits generated over the year helped improved the Bank’s capital by the same amount thereby bringing the total equity just a few hundred thousand below the P250.0 million mark. This ability of the Bank to remain profitable also resulted to a Return-on-Equity of 4.59% which is a percentage point higher than the previous year’s ratio. The Bank’s performance using Return-on-Assets measure slightly improved as well. Overall, these improvements are registered in NRBSL’s Capital Adequacy Ratio (CAR) of 17.62 at the end of 2021 which is up by almost 1 1/2 percentage points from the previous year. Behind this stable CAR level is the promotion of zero-risk loans and credit guarantee coverage which reduces risk weight on credit exposures. In this period of economic uncertainties, NRBSL leadership observes restraint in declaration of cash dividends on preferred stocks. Cash dividends declared of around P2.0 million approximated the pay-out during the previous period which are purely on preferred shares investments.

   The leadership of the Bank understands that the challenging situation that extends in 2021 could get more critical thus more drastic measures need to be undertaken within the organization. Major steps had to be pursued and bolder actions had to be adopted that somehow redefined the Bank’s expectations from its personnel to become more efficient and effective in the conduct of work functions. As more of NRBSL’s regular personnel have risen to the challenge to take on greater responsibilities subject to adjustments in compensation, this approach eliminates the need to regularize mediocre probationary employees. The results are lesser number but more productive 199 employees in 2021 compared to 212 the year before.