Tuesday, 9 February 2010

PNB’s net income doubles to P2.2 billion in 2009

Erik de la Cruz
Business Mirror

PHILIPPINE National Bank (PNB) reported a net income of P2.2 billion in 2009, double the figure it posted in 2008, and on Monday said it was looking to deliver a more solid performance this year as it gets bigger and stronger with its possible merger with Allied Banking Corp.

“Strong gains in its core businesses, improvement in asset quality and higher operating efficiencies drove the bank’s banner performance in 2009,” PNB, formerly government-owned but which is now controlled by businessman Lucio Tan, said in a statement.

PNB closed trading on Monday unchanged at P21 after dropping to its lowest at P20.75 on December 22, 2009. It hit its peak at P24.75 on December 29, 2009.

The bank, which is controlled by businessman Lucio Tan, said its net interest margin rose 18 percent to P7.8 billion on increased lending, while net gains from trading and investment securities hit P1.4 billion following the improvement in mark-to-market valuation of securities held for investment.

In a filing posted on the web site of the Philippine Stock Exchange, PNB said Tan is the beneficial owner of 462.70 million PNB shares, or 69.868 percent. His holdings are listed in the name of various corporate stockholders, which belong to the Tan group of companies. The list also shows foreigners owning 43.748 million shares, or 6.61 percent, which are held by Standard Chartered Bank as depository bank or record stockholder.

The market value of these investments was significantly eroded in 2008 when the global financial crisis rattled investors.

PNB expanded its loan and investment portfolios and participated as either lead or coarranger of several landmark debt issuances of big-name companies and the government in 2009.

The bank said its consumer-loan portfolio also grew “briskly” as it actively marketed its auto, housing and multipurpose loan products.

Its deposit liabilities rose 7 percent to P215 billion as of end-2009. Its offer of five-year long-term negotiable certificates of deposits in March raised P3.25 billion in additional funds.

PNB also launched last year medium-term dollar and peso time deposit products and renminbi savings and time deposit products.

Boosting the bank’s top and bottom-line figures were P1.9 billion in miscellaneous income, which improved 22 percent due largely to increased revenue from the sale of foreclosed properties.

In line with its prudent risk-management policies, PNB made additional provision for impairment and credit losses, pushing its nonperforming-loan (NPL) coverage ratio to 88 percent, from 82 percent in 2008.

Its NPL ratio further dropped to 5.9 percent as of end-2009, from 8.5 percent a year earlier and from more than 50 percent several years ago before it underwent a government-supported rehabilitation program.

The bank’s consolidated resources grew 3 percent to P284.5 billion. Aside from increased asset allocation toward loans, it built up other earning assets, including a P2.8-billion equity investment in Allied Commercial Bank (ACB) in Xiamen, China.

The asset growth, it said, came from the expansion in deposit base (7 percent) and stockholders’ equity (9 percent).

PNB also said its capital-adequacy ratio remained at 19 percent as of end-2009, well above the minimum regulatory requirement of 10 percent.

The bank said it expects to finally merge this year with Allied Bank, which Tan also owns, after the merger has finally hurdled regulatory and legal impediments. With the merger, PNB, as the surviving entity, expects to become the fourth-largest private local bank.

Legal issues have prevented the two banks from merging their operations, including the need for Allied Bank to divest itself of 28-percent equity interest in California-based Oceanic Bank before merging with PNB, which is required under US banking regulations.

Omar Byron Mier, PNB president and CEO, last month said the Tan group was hoping to complete the share sale by the middle of this year.

PNB was upbeat on prospects for 2010, saying it “expects to further build up on its solid achievements the past year [and] looks forward to the consummation of its legal merger with Allied Bank.”

“This [merger] will further fortify PNB’s franchise and enable it to better take advantage of the business opportunities in the new decade,” it said.

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