PNB profit up, but bad loan buffer pulls down parent LT Group’s performance
Tycoon Lucio Tan-led Philippine National Bank (PNB) booked P24.3 billion in net profit at end-September, about 6.3 times better than the earnings in the same period last year, mainly due to extraordinary gains from the spinoff of big-ticket real estate assets.
At the parent conglomerate level, however, higher provisioning for credit losses made by PNB dragged down LT Group Inc.’s (LTG) nine-month attributable net income by 38.2 percent to P9.95 billion compared to a P16.1-billion profit reported in the same period last year.
PNB recognized last May a one-off gain of P33.6 billion from the transfer of prime real estate properties in exchange for shares of PNB Holdings Corp.
At the LTG level, however, PNB’s extraordinary gains were not recognized. The bank had a negative net contribution of P5.20 billion to LTG’s bottom line.
However, the bank reported that its core operating income had risen by 8 percent year-on-year in the third quarter, spurred by sustained momentum in core lending and fee-based activities.
On a year-to-date basis, the bank’s net interest income declined by 1 percent to P25.76 billion amid lower yields on loans and investments brought about by the prevailing interest rate environment.
“Our performance this quarter shows that PNB continues to be profitable despite the negative impact of the pandemic on some of our customers and the overall economy,” PNB president and CEO Wick Veloso said in a press statement on Friday.
“With the recent reduction in COVID-19 cases, we are seeing a better-moving economy as the government is allowing more mobility. We continue to serve our customers and work together with the government with the goal of supporting the Philippine economy in the road to recovery,” he added.
At the LTG level, tobacco business accounted for P13.27 billion or 33 percent of total attributable income at end-September. Tanduay Distillers Inc. (TDI) added P998 million or 10 percent, while Asia Brewery Inc. (ABI) contributed P411 million.
Eton Properties Philippines Inc. accounted for P366 million, or around 4 percent, while a 30.9-percent stake in Victorias Milling Company Inc. (VMC) added P169 million or 2 percent of total.
For the tobacco business, net income for the period reached P13.32 billion, 9-percent higher year-on-year.
TDI’s net income slipped by 8 percent year-on-year due to lower margins.
ABI’s nine-month net income amounted to P411 million, a significant improvement from the P4 million in the same period last year.
Eton’s net income was P367 million, 42 percent lower, due to the decline in residential unit sales and lower leasing income.
