PNB doubles net profit to P5.4B

Tycoon Lucio Tan-led Philippine National Bank (PNB) doubled its six-month net profit this year to P5.4 billion compared to year-ago level on the back of higher interest earnings and hefty gains from the sale of idle assets.

PNB booked P4.4 billion in net gains in the first semester from the sale of foreclosed assets, up from only P216.6 million in windfall in the same period last year. Excluding these
nonrecurring gains, the growth in operating income still grew by 19 percent year-on-year.

Comprising almost two-thirds of total operating income, PNB’s net interest income rose by 27 percent year-on-year to P13.1 billion, driven by higher loan volumes and improving net interest margins.

The bank expanded its loan book by 16 percent year-on-year to P529.6 billion.

Net service fees and commission income in the first half reached P1.68 billion, P61 million better than year-ago level, boosted by improvements in credit, deposit and bancassurance fees which offset the lower underwriting and investment banking revenues owing to the lackluster activities in the capital markets during the period.

Trading and foreign exchange gains, however, slipped to P795 million from about P1 billion a year ago. The decline was due to muted trading opportunities brought about by the upswing in interest rates.

Operating expenses, excluding provisions for impairment and credit losses, grew by 18 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 12 percent.

PNB also set aside provisions for impairment and credit losses amounting to P1.2 billion for the first half in line with its provisioning policy to maintain the quality of its loan portfolio and in compliance with new accounting standards.

As of end-June, PNB’s total consolidated resources stood at P876.2 billion, up 6 percent year-on-year, while total equity rose by P10.4 billion to P124.3 billion.

Total deposits rose year-on-year by 8 percent to P672.2 billion.

On asset quality, PNB’s net nonperforming loans (NPL) ended the period at 0.30 percent of total loans while NPL coverage stood at 132 percent.

Common equity tier 1 ratio ended at 14.4 percent and capital adequacy ratio stood at 15.1 percent of risk assets.