Thursday, 6 August 2009

PNB’s first-half net income at record P1.53 billion

Erik de la Cruz
Business Mirror

PHILIPPINE National Bank (PNB) said on Wednesday it had a net income of P1.53 billion in the first half of 2009, surpassing its 2008 profits, reflecting strong gains in both lending and trading businesses.

PNB, one of the two local banks controlled by tycoon Lucio Tan, in a statement said the bottom-line figure was up 88 percent over what it earned in the same period last year and 37 percent higher than the full-year 2008 net income of P1.12 billion.

The bank, which had been burdened in the past by a huge volume of bad loans, also said it had brought down its nonperforming-loans ratio to a single-digit level this year.

The ratio dropped to 8.2 percent as of end-June from 12.2 percent a year ago. Despite an improvement in key financial ratios, the bank said it continued to make additional provisions 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.

Net interest income surged 40 percent to P4.2 billion, with income from loans and investment securities growing by an average 39 percent, outpacing the increase in interest paid for deposits and other borrowings.

The bank said its lending grew across all segments—corporate, consumer, and small and medium enterprises—with new loan releases in the first half totaling over P43 billion.

Deposits held by the bank, meanwhile, held steadily at the P200-billion mark, with the deposit mix improving in favor of low-cost funds, it said.

Noninterest income grew 24 percent.

PNB ranked fifth-largest by assets as of end-March among the more than 30 commercial and universal banks in the country. By end-June, its assets totaled P274.6 billion, contracting by 0.8 percent from end-2008 level after the bank redeemed P3 billion worth of Tier 2 notes in February.

Its capital adequacy ratio, a measure of capital strength against risk-weighted credit exposures, stood steady at 18 percent but remained well above the minimum regulatory requirement of 10 percent.

Although its merger with another Tan-controlled bank, Allied Banking Corp., has encountered delays due to some regulatory issues, PNB said the integration process has been started.

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