Letter to Stockholders

With the 5-year deadline imposed by the BSP to increase banks' minimum capitalization finally reached, the banking system continued to remain strong and well capitalized and Isla Bank likewise continues to do so. The Bank's capital build up program to increase its capitalization to P750 million was effected in March, 2019, seven months ahead of the BSP deadline.

The Bank's total resources for year-end 2019 was P1.39 billion. Our investible funds stood at P562.4 million at year-end, slightly higher by 1.3 percent compared to P 555.3 million the previous year. Philippine auto sales was relatively flat for 2019 as the industry felt the full impact of the TRAIN law which aimed to rationalize taxation on vehicles based on a new table, and additional excise taxes on fuel done in three tranches.

Consequently, our auto loan portfolio fell by 11.4 percent to P169.9 million by year-end compared to P211.7 million (due to lower loan demands and pre-payments). Again, the Bank did not carry any Non-Performing Loans (NPLs) in its loan portfolio.

We are pleased to inform you that the Bank reported a Net Income of P16.3 million in 2019, an increase of 13.2 percent over last year's P14.4 million. This was achieved by higher Net Interest Income (P4.0 million), despite a drop in other comprehensive income (-P1.1 million), and our ability to manage our Operating Expenses efficiently (an increase of only P0.500 million).

For 2020, economists anticipate the economy to bounce strongly after slumping to an eight-year low of 5.9 percent last year. At the beginning of 2020, the government projected the economy to grow between 6.5 percent and 7.5 percent, expecting public spending to spur robust economic activity. But disaster struck worldwide as the Coronavirus Disease 2019 (COVID-19), which was first identified in December 2019 in Wuhan, the capital of China's Hubei province, had since spread globally, resulting in the ongoing coronavirus pandemic.