PNB net income surges 88% to P1.53 billion in first half

MANILA, Philippines - Philippine National Bank (PNB) reported a net income of P1.53 billion in the first six months of 2009, 88 percent higher than the P813 million earnings in the same period last year, the bank said in a statement.

The first half profit, in fact, already 37 percent more than the P1.12-billion level for the whole of 2008.

The bank said loan for all segments expanded, with new loan releases amounting to over P43 billion.

PNB also participated in several big-ticket syndicated loans during the first semester either as lead lender or co-arranger. Loans accounted for a bigger share of total assets at 36 percent compared to 33 percent as of end, 2008.

PNB president and chief executive Omar Byron T. Mier said he expects the bank to continue to grow by double-digit in terms of net earnings.

“That has been our annual average income growth for several years, and we hope to keep it that way,” Mier said in an earlier interview.

The momentum for profitability was fueled by a sustainable base of core earnings, harnessing the branches’ potential to generate low cost funds, managing asset quality, and efficiencies in operations.

“PNB remained focused in delivering its best-ever bottom line performance in 2009 in spite of the volatility in the global financial markets and the projected weakening of the domestic economy,” it said.

Net interest income was higher by 40 percent year-on-year from P3 billion to P4.2 billion. Income earned from loans and investment securities grew an average 39 percent, more than enough to outpace the increase in interest paid for deposits and other borrowings.

It likewise availed of the rediscounting facilities of the Bangko Sentral ng Pilipinas’ to further improve its net interest margins. Deposits, on one hand, held steadily at the P200-billion mark with the deposit mix improving in favor of low cost funds.

Non-interest income grew 24 percent over the year with net trading gains of P266 million, owing to the significant recovery in accounting losses coming out of the required mark-to- market valuation of securities. Total operating income closed at P7.8 billion, higher by 32 percent year-on-year.

However, total operating expenses inched up 28 percent due largely to the impact of the early retirement program implemented in December 2008, and the recently signed collective bargaining agreement between management and the employees’ union.

“Additional provisions were made for impairment losses to conservatively position itself for possible deterioration in the quality of credit for some accounts, which may be affected by market conditions,” it added.

Non-performing loans (NPL) ratio was down to 8.2 percent from 12.2 percent a year ago.

Total resources stood at P274.6 billion, slightly 0.8 percent lower compared to 2008 despite the redemption of P3-billion worth of Tier 2 notes in February 2009. With the upsurge in profitability, stockholder’s equity grew five percent to P 27 billion.