THE Philippine National Bank on Tuesday said it registered P7.2 billion in net income for 2016, up 14 percent from P6.3 billion in 2015.
In a statement on Tuesday, the lender said a better core income supplemented by non-recurring revenue helped expand its bottom line.
Net interest income grew by 11 percent to P19.6 billion, accounting for nearly two-thirds of total operating income. Net interest margin was maintained at 3.2 percent, despite a decline in asset yield, compensated by a 12 percent growth in low cost deposits and the redemption of P6.5 billion worth of unsecured subordinated notes in June 2016.
The bank said its loans-to-deposits ratio stood at 73 percent, reflecting its focus on efficient deployment of funds.
PNB also noted a double-digit growth in non-interest income. Higher transaction volumes and favorable market conditions supported trading and foreign exchange gains that increased by 61 percent.
A significant increase in net gains from the sale of foreclosed assets highlighted the efforts to reduce non-earning assets.
Higher miscellaneous income lifted revenues, primarily the one-time gain from the sale of the bank’s 51 percent stake in a life insurance subsidiary.
On the other hand, operating expenses were controlled within single-digit growth, excluding expenses incurred for the migration to a more secure EMV chip for ATM and POS terminals, debit and credit cards, and a successful thematic marketing campaign.
“PNB’s healthy financials is the result of our continuing efforts to enhance our core business,” said President Reynaldo Maclang.
“A robust loans business and strong trading gains contributed to the bank’s sustained growth. The bank’s various business sectors played key roles in helping PNB keep its position as one of the country’s top private universal banks. We owe our success to the continued trust and support of our clients and business partners,” he added.
As of end-December 2016, total consolidated resources stood at P753.7 billion, up 11 percent or P74.0 billion from the year-ago level.
In the same comparable period, loans and receivables grew by 17 percent to P428.0 billion as corporate and commercial lending expanded by 16 percent and 25 percent, respectively, while consumer loans increased by 10 percent.
Deposits grew by 17 percent to P570.5 billion, on the back of higher low-cost deposits that comprised more than half of total deposits.
“Even as lending activities accelerated, the bank’s asset quality remained solid as the nonperforming loan (NPL) ratios declined further to 0.18 percent (net of valuation reserves) and 2.3 percent (gross) from 0.25 percent and 2.6 percent, respectively, in December 2015,” Nelson Reyes, PNB executive vice president and chief financial officer, pointed out.
“NPL coverage is now at 133 percent. With a capital adequacy ratio of 16.7 percent and a Common Equity Tier 1 ratio of 15.8 percent, which are well-above the minimum regulatory requirements, PNB’s consolidated capital position remained strongly positioned to take on growth opportunities as well as withstand external shocks,” he added.