Robust interest income boosts PNB earnings

MANILA, Philippines — Strong growth in net interest income boosted the profit of Lucio Tan-led Philippine National Bank (PNB) by 12 percent to P15.1 billion in the nine months to September.

“The bank’s core revenues steadily increased as we continue to enhance our policies and processes to sustain the growth momentum of the bank’s core banking activities amidst continued economic expansion,” PNB chief financial officer Francis Albalate said in a statement.

The bank’s net interest income rose by 10 percent to P36.5 billion during the January to September period, accounting for 83 percent of total operating income.

This increase was driven by the 15-percent growth in interest income arising from the expansion in customer loans, investments and other liquid placements, combined with improvement in the yields.

Meanwhile, the bank said the allocation of deposits to fund assets with better yields mitigated the impact of higher interest expense on deposits.

On the other hand, PNB’s other operating income stood at P4.1 billion as of end-September. This is lower than the figures posted a year ago, which included gains from the sale of foreclosed assets amounting to P3.7 billion.

Excluding non-recurring gains from the sale of foreclosed assets, other operating income jumped by 31 percent year-on-year, boosted by strong trading income from strategic positioning and timely churning of books.

PNB’s operating expenses inched up by one percent to P21.7 billion as revenue growth translated to higher business taxes and other business-related expenses.

The bank also set aside lower credit provisions of P3.7 billion during the nine-month period amid improving asset quality.

As of end-September, PNB’s total consolidated assets rose by two percent to P1.2 trillion driven by higher loans and treasury assets.

Its reported consolidated income for the period boosted its total equity by 13 percent year-on-year to P210.1 billion.

PNB’s capital adequacy ratio stood at 17.8 percent, while its common equity tier 1 ratio was at 16.9 percent. Both were above the minimum regulatory requirements.