Philippine National Bank, one of the top lenders controlled by tycoon Lucio Tan, said Wednesday consolidated net income after provisions and taxes hit P22.1 billion in the first half, or 16 times its earnings in the same period last year.
PNB said in a statement it registered core operating income of P19.3 billion in the six-month period as it managed to sustain core banking activities despite the prolonged impact of the COVID-19 pandemic on the operating environment.
The bank augmented its net income with the booking of a one-off gain of P33.6 billion. This represents the increase in fair market values of the bank’s three prime real estate properties which were transferred to PNB Holdings Corp. in exchange for shares.
"This brought the bank’s consolidated year-to-date net income after provisions and taxes to P22.1 billion, 16 times higher compared to its earnings for the same period last year," it said.
Net service fees and commission income grew by 45 percent, boosted by higher investment banking revenues as capital markets resumed momentum in the first half and increase in volume of credit and deposit-related transactions.
The bank’s net interest income slightly declined by 3 percent to P16.9 billion year-on-year on account of reduced earnings from loans and investment securities, reflective of the continued downtrend in the benchmark interest rates.
Loan receivables reached P618.2 billion as of end-June, up by 3 percent from prior the year as the bank re-focused credit granting to entities belonging to financially resilient industries.
Deposit liabilities at P828.1 billion also increased by 5 percent from a year ago, driven by a steady growth in CASA. Other borrowings of the bank declined year-on-year, due to the maturity of the P13.9-billion 6.3 percent fixed-rate bonds of the bank in May 2021.
Trading and foreign exchange gains declined by 57 percent to P1.6 billion resulting mainly from limited trading opportunities in the market during the period.
As part of its continuing proactive approach to address potential delinquencies from the protracted impact of the pandemic, the bank booked additional impairment provisions of P16.9 billion in the second quarter, bringing the total provisions to-date to P19.0 billion, higher than the levels seen in the same period last year. As a result, the bank’s NPL coverage ratio increased to 60 percent from 43 percent as of end-December 2020.
Operating expenses, excluding provisions for impairment and credit losses, remained relatively flat year-on-year at P13.4 billion as spending focused on more essential expenditures.
“The bank delivered excellent results during the first half of 2021 as we were able to sustain profits from core banking operations and reap the benefits of monetizing the value of low income-generating assets. This allowed the bank to continue to build our loan loss provisions as the pandemic continues to impact local businesses and the overall economy,” PNB president and chief executive Wick Veloso said.
PNB’s consolidated resources reached P1.1 trillion as of end-June, up by 2 percent from the year-ago level. The bank’s capital adequacy ratio of 14.0 percent and Common Equity Tier 1 Ratio of 13.24 percent were above the minimum regulatory requirement of 10 percent.