PNB net profit surges on loans, one-off gain
PHILIPPINE National Bank (PNB) saw its net income surge as of September, driven by one-off gains from asset sales as well as a bigger loan book.
The Tan-led lender reported a consolidated net income of P7.5 billion for January-September, spelling a 67% increase from the comparable year-ago period. PNB said this was driven by a 36% jump in total operating income, according to its regulatory filing to the Philippine Stock Exchange yesterday.
Net interest profits amounted to P20 billion, a fifth higher than the P16.2 billion it made during the same nine-month period in 2017. The bank’s loan portfolio reached P550.7 billion as of September, while deposits likewise increased to hit the P692.8 billion level.
Collections from service fees and non-interest income sources also posted a marginal increase to P2.5 billion, driven by higher revenues from credit, deposit and bancassurance products. These helped offset lower gains drawn from underwriting and investment banking at a time of tepid activity in the local capital markets, PNB said.
Meanwhile, gains from trading and foreign exchange dropped to P1.42 billion, as market players were reluctant to bet at a time of easing interest rates.
Providing a boost to the bank’s bottom line are one-off gains worth P4.6 billion from the sale of foreclosed properties. These are assets seized from non-paying borrowers which are eventually sold off by a bank in order to recoup loan losses.
On the other hand, PNB also incurred bigger costs as operating expenses grew by 16% year-on-year, largely due to higher business taxes.
Total bank assets reached P910.7 billion as of end-September, while the listed lender continued to be well-funded with a capital adequacy ratio of 14.8%, better than the central bank’s 10% standard.
PNB, the country’s fifthbiggest bank, announced in September that it will absorb its thrift unit PNB Savings Bank, subject to regulatory approvals. Once combined, the lender will have a total of 707 branches and over 1,390 automated teller machines in the country, on top of 70 overseas offices.
PNB President and chief executive officer Reynaldo A. Maclang will be retiring by Nov. 15. He will be replaced by Jose Arnulfo “Wick” A. Veloso, who was the former president and CEO of the Hong Kong and Shanghai Banking Corp. (HSBC) Philippines.
PNB shares dropped 0.13% to P39.25 apiece on Thursday.