Domestic subsidiaries of PNB report profits in first semester

The Philippine National Bank’s (PNB) domestic subsidiaries have reported profits for the first half of 2005.

PNB General Insurers Co. Inc (PNBGen) the bank’s non-life insurance firm, posted an unaudited net income of P64.3 million in the first half, surpassing by 19 percent its P54.1 million target for the six-month period.

In 2004, PNBGen recorded an audited net income of P112.96 million, a strong 30-percent increase from 2003’s P86.7 million.

PNBGen president Jose B. Zuniga said that PNBGen’s strong performance was due to "improved net underwriting income derived from its low claims loss ratio."

As a result, Zuniga said PNBGen boasts of a very high rate of return on equity (ROE) which is considered among the best in the industry. During the period, PNBGen’s ROE stood at 18 percent.

A wholly-owned subsidiary of the bank, PNBGEn’s product lines include fire, marine, motor car, surety, casualty, engineering and accident insurance. PNBGen ranks among the top five non-life insurers in the country in terms of profitability and capitalization. There are about 100 non-life insurers in the Philippines.

Another subsidiary, PNB Capital and Investment Corp. also reported a net income of P22.75 million for the first half of the year.

PNBCap is the investment house subsidiary of PNB which provides investment banking services such as loan syndication, underwriting of equity/debt issues, project finance, bond flotation, asset securitization, debt paper-related transactions, financial advisory and other investment banking services.

Another subsidiary, PNB Forex Inc. reported an unaudited income of P6.27 million for the first half of 2005. The subsidiary’s favorable performance came as a result of higher forex gains from the volatile peso and foreign currencies movements as well as the focused support and marketing efforts of the bank’s network of 324 branches.

PNB Forex is the bank’s wholly-owned foreign exchange dealer engaged in the buying and selling of foreign currencies.

PNB Securities likewise turned in profits and posted a preliminary and unaudited income of P2.68 million during the first six months of the year. The figure surpassed its targeted income of P425,000 by more than five times, an affirmation of its remarkable turnaround after several years of losses. The subsidiary posted a net profit of P7.2 million in 2004, a sharp turnaround from the P3.45-million net loss in 2003.

PNB Securities president Jerome Tan said the company’s remarkable turnaround was due to "improved securities market condition and higher business volumes." PNB Securities is the bank’s wholly-owned stock brokerage subsidiary that deals in the trading of shares and stocks listed in the stock exchange.

A joint venture between PNB and Japan’s well-established financial institutions, IBJ Leasing Co. Ltd. and Mizuho Corporate Bank, Japan-PNB Leasing and Finance Corp. ended June 2005 with a net income of P8.27 million.

Despite last year’s economic and political uncertainties brought about by the national elections and other overlying business concerns, Japan-PNB Leasing managed to book P745 million in new leases and loans, higher than its accomplishment in the previous year.

PNB president Omar Byron T. Mier said the favorable performances of PNB’s subsidiaries would boost further the bank’s profit potentials in 2005.

"The subsidiaries have complemented the bank’s profitability. They definitely provide the critical support necessary for the bank to sustain its momentum towards full rehabilitation," Mier said.