Higher loan yields boost PNB’s Q1 earnings
Philippine National Bank (PNB) grew its net income by nearly 57 percent to P2.81 billion in the first quarter because of better net interest earnings and easing of credit provisions.
In a disclosure on Friday, the publicly listed bank reported that its net interest income improved by 3 percent to P8.5 billion for the period, buoyed by higher yields on loans and lower interest costs on deposits.
Net interest margin rose to 3.4 percent for the period as a result.
“Our performance in the first quarter is a good indicator that the profit-making potential of PNB’s businesses continue to improve as the overall economy improves,” PNB president and CEO Wick Veloso said.
PNB saw its loan portfolio dipping by 7 percent to P583.9 billion in the first quarter because it continues to “refocus on borrowers under financially resilient industries.”
As of end-March, bank deposits inched up by 3 percent to P869.9 billion because of increasing demand for current and savings accounts.
The listed lender also reversed P394-million worth of credit provisions due to improving credit status of its borrowers, which it deemed to be “gradually recovering from the pandemic.”
PNB said this move was a “turnaround from the prior year when the bank was still continuing to build its loan loss reserves to cover the bank’s nonperforming accounts.”
Meanwhile, net service fees and commission income in the first quarter slipped 3 percent with the decline in underwriting fees. Trading and foreign exchange gains were slashed by 82 percent for the period because of higher benchmark interest rates.
As of end-March, the Lucio Tan-controlled bank has a total equity of P161.9 billion. Total capital adequacy ratio and common equity tier 1 ratio stood above the minimum regulatory requirement at 14.7 percent and 14 percent, respectively.
