Philippine National Bank (PNB) posted a 5 percent incease in net income to P5.5 billion last year despite the industry-wide lack of one-time extraordinary trading gains in 2013.
It said in a statement its growth is better than average “despite the challenging conditions in the local financial markets that caused the bank’s trading gains to decline substantially by 72 percent to P1.3 billion” from P7.2 billion recorded a year ago.”
“Anticipating these developments, PNB beefed up its income from its growing core business as it took steps to shift marketing focus from large corporations to commercial/SMEs (small and medium enterprises) and consumer segments,” the bank said.
Net interest income climbed by 23 percent to P16.9 billion, which accounted for 64 percent of total operating income last year that also went up 12 percent to P26.4 billion.
The bank’s net interest income perked up as a result of 16 percent growth in interest income on loans and receivables that reached P15.2 billion.
Its interest expense was reduced to 23 percent to P3.6 billion as it concentrated on generating low cost funds and paid off high cost liabilities —particularly with the redemption of P6.7-billion high interest-bearing long term negotiable certificates of deposits (LTNCD).
Total operating income was also pushed up by other income—exclusive of trading gains—that went up by 33 percent from the sale of the bank’s foreclosed assets.
Since fourth quarter last year, PNB implemented a strategy to aggressively dispose its acquired properties through public sealed biddings in all its domestic branches that yielded gains for the bank.
Consolidated resources surged to P625.4 billion from P616.2 billion the previous year.
Its non-performing loans (NPL) ratio decreased to 0.92 percent from 1.39 percent a year ago, while NPL coverage ratio improved to 99.19 percent from 90.84 percent.
PNB’s capital position remained healthy as its capital adequacy ratio and capital equity ratio stood at 20.6 percent and 17.4 percent, respectively, which are above the minimum benchmark of 10 percent and 8.5 percent by the central bank.
The improved capital position —in preparation for the higher minimum capital requirements of the Basel 3 framework—was due to the fresh capital raising of P11.6-billion and P7 billion from recent stock rights offering and LTNCDs issue, respectively.
Last year, the bank infused P10 billion from the stock rights offer to beef up its subsidiary PNB Savings Bank.
Incorporated in 1916, PNB is engaged in commercial banking with a total of 657 bank branches and 878 automated teller machines nationwide as of end-December last year.
The bank boasts of having most extensive international footprint in 18 different locations across Asia, Europe, Middle East, and North America with 77 overseas branches and offices among Philippine banks.