THE Philippine National Bank (PNB) reported last Wednesday that its net income hit P22.1 billion in the first six months of the year due mostly to the booking of a one-off gain of P33.6 billion.
The one-off gain represents the increase in fair market values of the bank’s three prime real estate properties which were transferred to PNB Holdings Corporation in exchange for shares.
This pushed the bank’s consolidated year-to-date net income after provisions and taxes 16 times higher compared to its earnings for the same period last year.
PNB closed on Wednesday at P21.60 per share; P1.10-higher than its previous close. “The bank delivered excellent results during the first half of 2021 as we were able to sustain profits from core banking operations and reap the benefits of monetizing the value of low income-generating assets. This allowed the bank to continue to build our loan loss provisions as the pandemic continues to impact local businesses and the overall economy,” PNB President and CEO Jose Arnulfo A. Veloso said.
PNB’s net service fees and commission income grew by 45 percent, boosted by higher investment banking revenues as capital markets resumed momentum in the first half of 2021 as well as increase in volume of credit and deposit-related transactions.
Its net interest income, meanwhile, slightly declined by 3 percent to P16.9 billion year-on-year on account of reduced earnings from loans and investment securities, reflective of the continued downtrend in the benchmark interest rates.
As of end-June 2021, loan receivables stood at P618.2 billion, up by 3 percent from prior year as the bank re-focused its credit granting to entities belonging to “financially resilient” industries.
Deposit liabilities at P828.1 billion also increased by 5 percent versus June 2020 levels. Trading and foreign exchange gains declined by 57 percent to P1.6 billion resulting mainly from limited trading opportunities in the market during the period.
PNB also reported that it booked additional impairment provisions of P16.9 billion during the second quarter of the year, bringing the total provisions to-date to P19 billion. This brings the bank’s non-performing loan coverage ratio to 60 percent, up from 43 percent as of end-December 2020.
Operating expenses, excluding provisions for impairment and credit losses, remained relatively flat year-on-year at P13.4 billion as spending was focused on more essential expenditures.