Spinoff of property assets fuels PNB to hit P31.7-B profit
Taipan Lucio Tan’s Philippine National Bank (PNB) saw profits surge over 12 times last year after recognizing gains from the spinoff of coveted property assets to a subsidiary.
PNB said in a statement on Wednesday that even without those gains, income from “core banking operations” rose 2 percent to P40.1 billion in 2021 on higher commissions and underwriting deals while interest earnings growth was relatively flat.
PNB ended the year with a consolidated net income of P31.7 billion compared to P2.6 billion in 2020.
This was due to the P33.2-billion gain from the property-for-share swap that resulted in the transfer of land assets to PNB Holdings Corp.
These reportedly included the 10-hectare head office along Macapagal Avenue, the old Allied Bank building in Ayala Avenue and the 8,000-square-meter prime lot foreclosed from musician Ramon “RJ” Jacinto.
“PNB continued to be profitable and was able to provide nonstop banking services to customers and the general public during the pandemic,” PNB president and CEO Wick Veloso said in the statement.
Article continues after this advertisement“We continued to play our part in helping customers and employees by building safer banking processes and services amid the continuing pandemic situation,” he added.
Article continues after this advertisementPNB also recorded lower impairment and credit provisions last year. It also reduced operating expenses and cut nonperforming loans or debts, which were difficult to collect amid the COVID-19 pandemic.
It said in the statement it sold some of these bad debts with “gross carrying amounts prior to sale” of P5.5 billion, resulting in gain on sale of P767 million.
Meanwhile, earnings were driven by the 43-percent growth in net service fees and commissions, followed by “significant” gains in its bancassurance and underwriting deals. PNB also earned fees from the use of its digital platform.
Interest income hit P34.8 billion last year while PNB maintained its net interest margin of 3.2 percent. Its loan portfolio added 1 percent to P607 billion, while total deposits increased by half a percent to P894.9 billion.
