PHILIPPINE National Bank, the country’s sixth-largest lender in terms of assets, posted a 38-percent decrease in net income in the first half of 2017 to P2.7 billion from P4.3 billion a year ago.
A bank statement Friday said the decline was due to the “one-time gains amounting to P2.7 billion” in the comparable period last year as the bank disposed of foreclosed assets, net gain on the sale of shares of stock of a subsidiary and collection of non-performing assets.
Despite the double-digit fall in net profit, PNB said it sustained the growth momentum in its core lending and deposit-taking businesses and notable gains from fee-based activities.
The bank’s net interest income increased by 8 percent year-on-year, primarily driven by 13-percent growth in interest income earned from loans and receivables on the back of 16-percent expansion in loan portfolio, boosted by increases in loans to corporate, commercial and small and medium-sized enterprises.
“During the first half of the year, the bank also accessed the BSP’s term deposit facility which offered better yields that led to a substantial hike in interest income earned from placements with banks and others, thus more than offsetting the lower interest income contribution from trading and investment securities,” it said.
Net service fees and commission income grew 12 percent as the bank intensified its cross-selling efforts to its customers. Meanwhile, treasury-related income decreased substantially owing to muted trading opportunities as investors continue to stay on the sidelines amid further global monetary tightening and interest rate development in the international markets.
Operating expenses excluding provision for impairment and credit losses, meanwhile, expanded moderately at 6 percent over the same period last year due to prudent spending despite aggressive business growth.
PNB’s total consolidated resources as of end-June 2017 stood at P824.0 billion, up P111.6 billion or 16 percent from year-ago level. The asset expansion was largely funded by deposits which increased by 17 percent from June 2016 levels as the bank continued to focus on generating low-cost funds and replacing matured high-cost Tier 2 Notes with Long-Term Negotiable Certificates of Deposit (LTNCD).
Notwithstanding the aggressive loan growth, the bank’s net non-performing loans (NPL) ratio remained low at 0.25 percent. NPL coverage is now at 13O percent.
PNB’s consolidated risk-based capital adequacy ratio (CAR) based on BSP guidelines was at 15.89 percent as of June 2017, above the regulatory requirement of 10 percent.
As of June 30, 2O17 , PNB had a total of 685 branches and 1,143 ATMs strategically located nationwide.