PNB says P2-billion profit target attainable

MANILA, Philippines - The Philippine National Bank (PNB) is optimistic of ending 2009 with a net income of P2 billion.

In the first six months of the year, PNB reported a net income of P1.53 billion, or 37 percent better than the P1.12 billion recorded for the whole of 2008.

The six-month figures was also 84 percent better than the P813 million recorded in the same period last year.

PNB president and chief executive officer Omar Byron T. Mier said that taking into consideration so many variables, “it only means we have to hit between P500-million to P800-million during the next semester.”

“Some banks expect the second half to be tougher than the first half. So far, we have not seen any major contraction in loan applications, we have not seen any big deterioration in our non-performing loans (NPLs). Things were holding steady so, if (the trend) will continue then we’ll be OK for the rest of the year,” Mier said.

Mier admitted that remittances from the United States were far from desirable. But business from the Middle East and Europe remained strong.

“If we see a pickup (in remittances) by August or September, there’s a chance that it will be either flat or growing over 2008,” he added.

The Bangko Sentral ng Pilipinas (BSP) said recently that the remittance business this year could go over $17 billion, slightly better than the $16.4 billion last year.

Meanwhile, loan demand from the corporate and consumer markets remained on the upside.

PNB participated in several big-ticket syndicated loans in the first semester and it has the appetite and resources to stay on that track. In the first semester, loans accounted for a bigger share of total assets at 36 percent compared to only 33 percent end 2008.

The commercial bank of tycoon Lucio Tan continues to take in government deposits while maximizing its advantages in tapping the local government unit (LGU) market.

Loans from LGUs in fact account for roughly 20-percent of the bank’s lending portfolio.

Likewise, PNB only started to seriously focus on consumer loans last year.

Bank officials in fact admitted that the existing customer base is still largely untapped.

Mier said that a 10-percent expansion this year of its total loan portfolio was a conservative estimate.

Income earned from loans and investment securities grew an average 39 percent in the first six months of 2009, more than enough to outpace the increase in interest paid for deposits and other borrowings.

Meanwhile, Mier is optimistic that the much-anticipated merger between Allied Banking Corp. and the PNB will be consummated within the next six to eight months.

The only obstacle is the disposal of the 28-percent stake of Allied Bank in California-based Oceanic Bank.

Several investment banks have been tapped to look for buyers, and the prospects are good.