PNB's bad loans ratio improves to 4.42%

MANILA, Philippines - Philippine National Bank (PNB) said its non-performing loan (NPL) ratio improved to 4.42 percent at end-June this year, from the end-March figure of 6.2 percent.

The bank said the huge improvement in the NPL ratio was due to a reduction of bad accounts by about P1.3 billion and the expansion in its credit portfolio.

Based on its latest balance sheet, PNB’s total NPLs stood at P7.67 billion as of end-June, from P9 billion in the first three months of the year.

Net loans and receivables reached P117 billion, from P101.2 billion in March, while deposit liabilities increased to P225.2 billion from the previous quarter.

Total assets ballooned to P294.15 billion.

Risk-weighted capital adequacy ratio (CAR) stood at 15.97 percent, well above the minimum regulatory requirement of 10 percent, with the Tier 1 or core CAR at 10.87 percent.

The bank’s NPL ratio reached a record 50 percent in the late 1990s, forcing the monetary regulator to step in, implement a capital restructuring, and inject P25 billion as liquidity assistance.

In 2005, taipan Lucio Tan bought out the government. Today, PNB and Allied Banking Corp., also owned by Tan, is in the process of merging and forming the country’s fourth largest bank.

PNB ranked eighth biggest in net loans and receivables and fifth in terms of deposits as of the first quarter and is looking to improve its industry rankings within the next three years.

Meanwhile, Allied Bank reported assets worth P186.4 billion, P91.4 billion in net loans and receivables, and P150.7 billion in deposit liabilities.

PNB will be the surviving entity in the merger with Allied Bank, which is now in the process of selling its 28-percent stake in Oceanic Holding (BVI) Ltd., owner of California-based Oceanic Bank, to a certain John Kim Chuy Ng. The sale of Oceanic Bank is the last remaining hindrance to the planned merger.