TYCOON LUCIO TAN?S Philippine National Bank reported a 134-percent growth in nine-month net profits to P2.11 billion over a year ago on a double-digit increase in net interest income and a triple-digit rise in treasury gains due to an improved financial environment.

The net profit booked for the January to September period stood 88 percent better than its full year net income of P1.12 billion in 2008.

?The year 2009 is proving to be a banner year for PNB. The bank is expected to close the year with its highest bottomline income performance ever in 12 years, now surpassing the P2 billion mark,? the bank?s press statement said.

Nine-month net interest income went up by 30 percent to P6 billion over a year ago, owing to the increase in business volume and wider interest margins. Total loans and receivables hit P113.9 billion, up 24 percent year-on-year.

Corporate lending activities focused on acquiring new customers, expanding relationships with existing accounts, and participating in big-ticket syndicated loans either as lead-lender or co-arranger. The consumer lending business, particularly home and auto loans, improved on its cross-selling efforts to the bank?s domestic and overseas customer base.

Given the increase in its lending portfolio, the share of loans to total assets went up to 40 percent from 33 percent at end-2008. As a result, the deployment of funds to higher-yielding assets improved the bank?s interest margins.

On the other hand, deposits went up by P10 billion from year to date to close September at P211.2 billion, with the deposit mix improving in favor of low-cost funds.

PNB?s bottomline income was further buoyed by the 50-percent increase year-on-year in other operating income which closed at P5.6 billion. Net trading and investment securities gain was positive at P1.02 billion, up by 215 percent from year-ago levels partly due to favorable mark-to-market valuations of securities ending September.

The bank also registered higher income on properties sold and likewise out of fair value adjustments on foreclosed assets. The increase in all other operating income components was more than sufficient to cover the reduction in foreign exchange income caused by the lower revaluation of foreign currency denominated accounts.

Meanwhile, operating expenses rose by 32 percent largely due to higher provisions for impairment and credit losses. Specifically, the bank made additional provisions of P1.1 billion for impairment loss covering loans and receivables, and foreclosed assets. This brought the nonperforming loan cover to 79 percent.

?PNB opted to take a more prudent stance given the lingering vulnerability of the local economy to adverse market conditions which may cause some deterioration in the credit quality of some accounts,? the bank said.

The NPL ratio improved to 6.9 percent from 10.6 percent a year ago.

PNB?s total resources closed at P286 billion, 3.4 percent higher versus December 2008. Asset growth was primarily funded by the 5-percent expansion in deposits and the 9-percent increase in stockholders? equity. Its capital adequacy ratio to risk assets amounted to 18 percent, higher than the minimum regulatory requirement of 10 percent.