PNB net profit up 15%

THE LUCIO Tan group’s Philippine National Bank (PNB) posted a 15-percent growth in net profit last year to P6.3 billion, driven by higher earnings from its core lending and fee-based businesses.

In a statement, PNB said net interest income improved by 7 percent to P17.7 billion. This accounted for 67 percent of total operating income.

Despite the squeeze in margins, PNB said interest income on loans and receivables grew by 13 percent to P17.1 billion, supported by a steady growth in the bank’s loan portfolio, propelled by strong corporate and commercial and well as small and medium enterprise (SME) lending business.

PNB grew its loan book by 18 percent, faster than the average industry loan growth of 13 percent. For every P1 of deposit generated, 74 centavos were lent out.

Interest expense on deposits was contained at 7 percent to P3 billion despite a 9-percent growth in deposits as the bulk of these continued to be in low-cost funds.

PNB’s interest expense on borrowings rose by 20 percent to P1 billion as the bank closed a $150-million three-year syndicated term loan facility with a large group of international and regional banks in April 2015, marking its return to the syndicated loan market after more than a decade. PNB last tapped such foreign currency-denominated club loan in 1998. The loan facility was 1.5 times oversubscribed, indicating a strong capital market confidence in the credit strength of the bank.

Net service fees and commissions rose by 25 percent to P3.6 billion, principally generated from underwriting and credit-related transactions.