Philippine National Bank, one of the largest lenders led by tobacco and airline tycoon Lucio Tan, posted a 57-percent increase in first-quarter net income to P2.81 billion from P1.79 billion a year ago on improved net interest income and net reversals of credit provisions.
PNB president and chief executive Wick Veloso said in a statement Friday the first-quarter performance was a good indicator that the profit-making potential of PNB’s businesses continued to improve as the overall economy rebounded.
“We support the incoming leadership and will channel our efforts to help support our customers and support the rebounding economy,” Veloso said.
Net interest income stood rose 3 percent to P8.5 billion, on higher yields on loans, alongside reduced interest costs on deposits. Net interest margin increased to 3.4 percent from 3.2 percent in the same quarter in 2021.
Gross loans closed at P583.9 billion, down by 7 percent from the level last year, as the bank continued to refocus on borrowers under financially-resilient industries. Deposit liabilities expanded by 3 percent year-on-year to P869.9 billion coming from the build-up of current and savings accounts.
PNB recognized net reversals of credit provisions of P394 million to consider the improvement in the credit status of borrowers of the bank who were gradually recovering from the pandemic. This was a turnaround from the prior year when the PNB wascontinuing to build its loan loss reserves to cover non-performing accounts.
Net service fees and commission income slightly declined 3 percent, on lower underwriting fees as the prior year saw the resumption of various capital market transactions and the economy re-opened beginning in the first leg of 2021.
Trading and foreign exchange gains contracted by 82 percent year-on-year as a result of the hike in benchmark interest rates during the period.
Operating expenses increased by 6 percent year-on-year on account of higher amortization costs for the leased properties of the bank where it is holding its operations. These properties were the subject of the properties-for-share swap executed in 2021.
Total consolidated resources as of end-March amounted to P1.1 trillion, primarily driven by higher investment securities and other liquid placements despite the reduction in loans.
The bank’s total equity improved 5 percent year-on-year to P161.9 billion. Capital adequacy ratio and common equity tier 1 ratio were at 14.7 percent and 14.0 percent, respectively, above the minimum regulatory requirement of 10 percent.