SEC clears PNB asset transfer

MANILA, Philippines — The Securities and Exchange Commission (SEC) has allowed Philippine National Bank (PNB) to transfer its low-earning assets to a wholly owned holding firm in a bid to strengthen the bank’s financial position.

In a disclosure to the Philippine Stock Exchange, the bank controlled by tycoon Lucio Tan said its subsidiary, PNB Holdings Corp., has received the certificate of approval for an increase in capital from the SEC last Thursday.

With the approval, PNB acquired an additional 466.77 million shares of PNB Holdings worth P46.67 billion at a par value of P100 per share, in exchange for PNB’s real estate properties.

“The subscription forms part of a series of transactions which will be undertaken to realize the market value of the bank’s prime properties and reduce low-earning assets to strengthen the bank’s financial position,” the bank said in the disclosure.

Last Sept. 10, the board of directors of the country’s fifth largest lender approved a plan to realize the market value of its prime properties and reduce its low-earning assets to strengthen its financial position.

PNB president and chief executive officer Jose Arnulfo Veloso said the transaction would allow the bank to boost its lending portfolio by P80 billion from the sale of low-earning assets.

PNB’s inventory includes the 10-hectare PNB Financial Center along Macapagal Boulevard in Pasay City, office buildings in the central business district and a foreclosed eight-hectare property along Gil Puyat Avenue in Makati City.

The Tan-led bank announced in 2018 that it was planning to put up a state-of-the-art, world-class 60-story building that would serve as its new headquarters.

The pandemic-induced recession has prompted Philippine banks to sacrifice higher earnings by beefing up their respective provision for potential loan losses.

PNB recovered in the third quarter last year as earnings inched up by 2.9 percent to P2.51 billion from P2.44 billion in the same quarter the prior year as provision for probable bad loans declined by five percent to P587.34 million from P618.11 million.

For January to September, PNB augmented its COVID-19 war chest to P9.03 billion or six times the previous year’s P1.43 billion.

As a result, PNB’s net income retreated by 39 percent to P3.9 billion from P6.4 billion.