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Follow on Google News | PNB Sustains its Profitability in 2020 Amid the PandemicPNB's net interest income, comprising 79% of the total operating income, increased by 11% to P35.8 billion, supported by lower funding cost which cushioned the drop in yield rates of earning assets. Interest expense on deposits declined by almost half its year-ago level despite an 8% growth in deposits to P890.3 billion as the bulk of these incremental deposits continued to be in low-cost funds, combined with the reduction in high-cost deposits, partly due to the maturity of P7.0 billion worth of Long-Term Negotiable Certificates of Time Deposit (LTNCDs). On the other hand, interest income on loans and receivables decreased by 6% as the Bank's loan portfolio declined by 9% year on-year to P600.0 billion. This reflected the weak demand for loans owing to economic uncertainties as well as PNB's strategy to focus on strengthening its liquidity position by investing most of the available funds in short-term and more liquid placements to remain resilient during the pandemic. The Bank took advantage of favorable market opportunities during most part of the year, resulting in more than three-fold increase in net trading securities gains to reach P3.3 billion from year-ago level. These gains more than compensated for the decrease in net service fees and commission income which was significantly reduced by the general decline in corporate banking transactions. In addition, the Bank waived fees on local interbank transfers and overseas remittances as an affirmation of its commitment to be an institution that can be relied on not only in terms of sustained delivery of financial services but also in easing the financial burdens of its customers in times of crisis. Growth in operating expenses, excluding provisions for impairment and credit losses, was kept moderate at 8% as the Bank adjusted its expenditure priorities and supported pandemic-related expenses such as supplemental costs for frontline employees supporting the Bank's operations during the quarantine period. To view the full article, visit: https://www.pnb.com.ph/ End
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