PNB profit slips to P9.7 billion

MANILA, Philippines — Philippine National Bank (PNB) earnings slipped by 12 percent to P9.74 billion in the first half of the year due to the sharp rise in provision for potential loan losses, as well as lower gains from the sale of assets.

Despite the decline, PNB president Florido Casuela said the bank “is able to sustain its profitability on the back of sound execution of business strategies that are expected to ensure long-term growth as set forth in our vision, mission, and strategy for the next five years.

“Our growth initiatives are focused on strengthening commercial banking and the consumer finance business. We intend to play a key role in helping small and medium enterprises flourish as the nation continues its journey towards recovery,” Casuela said.

PNB’s total operating income grew by 12.1 percent to P29.29 billion from January to June this year.

Net interest income jumped by 24.6 percent to P21.61 billion, primarily driven by higher yield rates on earning assets amid the rising interest rate environment.  This translated to an improved net interest margin of 4.24 percent from 3.35 percent.

Net fee-based revenues surged by 31 percent to P3.13 billion from P2.38 billion with higher volumes of credit and deposit-related transactions as well as intensified cross-selling efforts of PNB during the period.

On the other hand, total other income fell by 28.9 percent to P4.54 billion as net gains on the sale or exchange of assets plunged by 44.1 percent to P2.93 billion from P5.25 billion.

PNB’s provision for impairment, credit and other losses amounted to P1.57 billion, reversing last year’s P3.16 billion as a major portion of the bank’s non-performing COVID-impacted accounts showed improvements in their credit and payment status with the reopening of the economy and recovery of most businesses in 2022.

“The bank prudently set aside additional provisions amounting to P1.6 billion given the prevailing uncertainties in 2023 due to rising interest rates,” PNB said.