PNB income grows 14% in 2017

MANILA, Philippines — The banking arm of tobacco and airline magnate Lucio Tan booked a double-digit growth in earnings last year on the back of higher core operating income.

In a disclosure to the Philippine Stock Exchange, Philippine National Bank (PNB) said its net income grew 14 percent to P8.2 billion last year from P7.2 billion in 2016.

The bank said its net interest income went up 13 percent, driven by the 17 percent increase in its loan book to P502.1 billion. Total deposits increased 12 percent to P637.9 billion.

Net service fees and commission income was higher by 16 percent, fueled by growth in loan- and deposit-related services as well as improved investment banking fees.

PNB also reported higher net gains on disposal of foreclosed properties in line with the bank’s continuing strategy of reducing its non-earning assets. It raised P3.9 billion from the sale of foreclosed assets last year, higher than the P2.5 billion recorded in 2016.

The bank pointed out the volatile markets resulted in a 22 percent plunge in its trading and foreign exchange gains.

On the other hand, operating expenses, excluding provisions for impairment and credit losses, inched up seven percent last year.

The country’s sixth largest bank in terms of assets said its consolidated resources increased 11 percent to P836.2 billion last year.

PNB has a total of 692 branches and 1,243 ATMs nationwide. It also has the most extensive international footprint with 72 overseas branches, representative offices, remittance centers and subsidiaries across Asia, Europe, the Middle East and North America.

PNB is raising as much as P20 billion as it plans to return to the debt market via the issuance of long term negotiable certificates of deposit (LTNCDs) in one or more tranches.

Proceeds would be used to extend the maturity profile of the bank’s liabilities as part of overall liability management and supports compliance with required BSP liquidity ratios.

Furthermore, the activity would also raise long-term-funds for general corporate purposes.

Last October, PNB raised P6.35 billion from the issuance of LTNCDs due April 2023, more than double the issue size of P3 billion. The instrument that fetched an interest rate of 3.875 percent per annum was listed at the Philippine Dealing and Exchange Corp.

This brought the amount of LTNCDs issued by PNB to P22.495 billion over the past three years. In December 2014, PNB also issued P7 billion worth of LTNCDs due 2022.