PNB reports 67% jump in 9-month net income

Philippine National Bank grew net profit in the first nine months by 67 percent year-on-year to P7.5 billion from P4.5 billion on higher core earnings and gains from the sale of foreclosed assets.

Accounting for almost two-thirds of total operating income, PNB’s net interest income rose by 24 percent year-on-year to P20 billion in the first nine months, mainly due to the growth in the loan and investment securities portfolio.

The bank expanded its loan book by 10 percent year-on-year to P550.7 billion, while total deposits were higher by 9 percent to P692.8 billion.

Other income surged to P7.1 billion compared to P2.9 billion for the same period last year mainly due to higher net gain on sale or exchange of assets amounting to P4.1 billion.
Trading and foreign exchange gains, however, dropped by P400 million to P1.42 billion given muted trading opportunities brought about by the continuing upward movement of interest rates.

Net service fees and commission income stood at P2.5 billion, 6 percent higher compared to the same period last year. The tempered growth was attributed to slower underwriting and investment banking fees compared to the same period last year while net insurance premium stood P358 million lower compared to the same period last year due mainly to higher insurance claims for the period.

Excluding nonrecurring gains on the sale of foreclosed assets, the growth in total operating income remained high at 18 percent year-on-year.

On asset quality, net
nonperforming loans (NPL) ratio stood at 0.37 percent as a ratio of total assets. For every P1 of NPL, the bank set aside coverage of P1.34.

Provision for impairment, credit and other losses increased by P1 billion in line with the bank’s prudent provisioning in compliance with new accounting standards.
Operating expenses, excluding provisions for impairment and credit losses, grew by 16 percent over the same period last year, as strong revenue growth translated to higher business taxes and other business-related expenses. Without taxes and licenses, operating expenses increased by 11 percent.

As of end-September, PNB’s total consolidated resources stood at P910.7 billion, up by 9 percent from the end-2017 level while total equity increased by P6.5 billion to P126.2 billion from 2017 year-end levels.

Common equity tier 1 ratio stood at 14 percent while capital adequacy ratio was at 14.8 percent.—DORIS DUMLAO-ABADILLA