The increase in assets was pushed by the expansion in customer deposits and proceeds from the issuance of Tier 2 capital, which were deployed in trading and investment securities and interbank loans.
The first semester performance proves the continued effectiveness of the rehabilitation initiatives started in mid-2002, anchored on the "Good Bank – Bad Bank" strategy, the PNB said in a statement.
The PNB statement said deposit liabilities grew by seven percent to P158.238 billion from P148.291 billion in December 2003. This was propelled by an increase in low-cost deposits whose average deposit balance grew by P6.431 billion or 11perent during the first half of the year.
Trading and investment securities also contributed to the healthy growth in the bank’s asset base, expanding by 12 percent to P51.476 billion from the P45.964 billion level as of end-2003.
A total of P2.325 billion in loans were restructured collected and foreclosed during the first half of 2003. Consequently, non-performing loans (NPL) ratio declined to 45.6 percent in June 2004, from the end-2003 figure of 46.4 percent.
Net Interest Margin grew by a hefty 52 percent or nearly P400 million during the semester. Interest Income increased by P474 million driven by improvements in the portfolio mix of investments and loan restructuring efforts.
Interest expense grew slightly by P77 million mainly due to higher interest rates during the period, tempered by a much improved funding cost structure.
Fee-based and other income amounted to P2.272 billion from the previous year’s P2.551 billion, mainly because of lower collection figure for fees and charges. Trading gains on investment securities, income from acquired assets as well as rentals of bank premises and equipment continued to be strong during the period.
Total ROPOA (real and other properties owned or acquired) sales amounted to P1.029 billion, compared to P875 million last year. The bank held public auctions of foreclosed properties in various parts of the country, such as in Tarlac, Batangas, Camarines Sur, Cebu, Bacolod, Davao, Cagayan de Oro, and Zamboanga.