Philippine National Bank on Thursday reported a surge in its earnings as of the end of the third quarter of the year, coinciding with a frenzy of rumors following the lack of fresh developments on its reported merger plans with Bank of the Philippine Islands.
In a statement, PNB said its net income grew by 92.5 percent to P3.8 billion as of the end of September, compared to year-ago level.
The bank said its latest income figure translated to a return on equity of 14 percent for the period, an improvement over the 9-percent return for the third quarter of 2011.
The trading of the shares of both PNB and Ayala-controlled BPI on the Philippine Stock Exchange resumed Thursday, with neither bank announcing any fresh developments in their talks.
The silence on both parties came amid rumors that talks between both lenders are on the rocks, following a supposed counter-offer made to Tan by BDO Universal Bank of the Sy family.
A ranking BDO official, however, denied that the bank had come into the picture of the BPI-PNB deal.
An official of the Ayala group—speaking on condition of anonymity—conceded that negotiations between the two parties were “encountering issues that have yet to be ironed out.”
In the meantime, PNB said Thursday its total operating income was up 32 percent to P14.1 billion, largely accounted for by improvements in interest income from loans and receivables, reduction in interest expense and net gains from trading and investment securities.
Net gain on trading and investment securities was up 13 times over year-ago level, from P315.2 million to P4 billion, by the close of the third quarter due to the gain in the sale and redemption of available-for-sale securities.
PNB beefed up its inventory of available-for-sale investments by 18 percent, or P9.3 billion, versus end-2011.
Net profit on foreign exchange was likewise up 31 percent.
Interest income on loans and receivables grew by 3 percent, or higher by P184 million, due mainly to the continuous drive to shore up lending across segments: top-tier corporations; SME and middle markets; and retail for consumer loans. Loans and receivables grew by P4.2 billion to close at P130.4 billion.
Non-performing loans dropped further to P6.5 billion compared to P6.9 billion as of the end of 2011.
The bank also made significant headway in building its consumer loans business. Home and auto loan bookings grew by over 100 percent and 30 percent, respectively, year on year, surpassing 2011 levels as of the end of the third quarter this year.
The bank also reported a 19-percent reduction in interest expense year on year owing mainly to an improvement in the average cost of funds given the deliberate move to focus on generating low-cost deposits.
The decrease in high-cost term placements was partly offset by the P1.7-billion increase in savings deposits. PNB’s deposit levels stood at P235.9 billion.
Administrative and other operating expenses were up 18 percent due to the accrual of adequate provisions for loss on legal cases and fire loss on a certain property.