Philippine National Bank, led by tycoon Lucio Tan, grew its net profit last year by 34 percent to a record-high P4.7 billion, as hefty trading gains complemented a modest rise in net interest income.
In a disclosure to the Philippine Stock Exchange, PNB said its audited net profit last year translated to a return on equity of 13 percent, up from 11 percent a year before.
Following a Bangko Sentral ng Pilipinas reportorial requirement to deduct the amortization on deferred special purpose vehicle losses against current operations instead of charging this against surplus, net income for 2011 was adjusted to P3.9 billion, still up by 44 percent from the previous year.
Trading gains rose as PNB took advantage of opportunities in the financial market and unloaded substantial holdings of securities. Net gains from trading, investment securities and foreign exchange surged by 23 percent. Interest income on loans and receivables expanded by 4 percent.
PNB said lending was pressured by the low interest-rate environment, which squeezed margins. This was partly offset by the bank’s move to increase its exposure to the consumer market.
Operating expenses dipped by 10 percent, or P1.2 billion, while the bank increased its efficiency by lowering its cost-to-income ratio to 61 percent from 76 percent four years ago.
Total resources expanded by 5 percent to P316.3 billion. About P11.1 billion in additional deposits was generated in 2011 to end the year with P237.5 billion.
PNB’s nonperforming loan dropped to 3.1 percent at end-2011 from 4.5 percent in 2010.—Doris C. Dumlao