PNB expects 13-14% growth in net income in 2018

Tycoon Lucio Tan-led Philippine National Bank expects to sustain a 13-14-percent growth in net profit this year, mostly driven by core lending activities and fee-based earnings.

The bank’s thrift bank arm PNB Savings, for its part, has set a full-year net profit guidance of P800 million, around 74 percent higher than the level in the same period last year.

On a consolidated basis, PNB executive vice president and chief financial officer Nelson Reyes said the bank’s net profit would likely grow at a similar midteen pace this year, mostly due to the expansion in core lending activities as treasury income dwindles.

“We expect our net income to grow at a similar pace, midteens level, but this time, the major driver for that will be the increase in core income,” Reyes said.

“The sources of volatile income have been reducing, one of which is trading income. In the past years, we’ve had some one-offs like gains from sale of foreclosed assets, gains from the sale of shares in subsidiaries. These are obviously events that we can’t repeat every year so the major strategic focus of the bank in the last few years is really to grow our core income—lending, deposits and fees,” he said.

Last year, PNB grew its net profit by 14 percent to P8.2 billion. A similar growth pace this year could boost this year’s bottom line to P9.35 billion.

In the last four years, PNB saw a compounded annual growth rate of 28 percent in its risk assets, thereby increasing the share of core income. Reyes added that the bank’s focus would shift from large corporations to commercial/small and medium enterprise (SME) and consumer sectors where margins are higher.