PNB sustains profitable performance for first half of 2021
During the period, the Bank augmented its net income with the booking of a one-off gain of P33.6 billion. This represents the increase in fair market values of the Bank's three prime real estate properties which were transferred to PNB Holdings Corporation in exchange for shares. This brought the Bank's consolidated year-to-date net income after provisions and taxes to P22.1 billion, 16 times higher compared to its earnings for the same period last year.
Net service fees and commission income grew by 45 percent, boosted by higher investment banking revenues as capital markets resumed momentum in the first half of 2021 as well as increase in volume of credit and deposit-related transactions.
The Bank's net interest income slightly declined by 3 percent to P16.9 billion year-on-year on account of reduced earnings from loans and investment securities, reflective of the continued downtrend in the benchmark interest rates. As of end-June 2021, loan receivables stood at P618.2 billion, up by 3 percent from prior year as the Bank re-focused its credit granting to entities belonging to financially resilient industries. Deposit liabilities at P828.1 billion also increased by 5 percent versus June 2020 levels, driven by steady growth in CASA. Other borrowings of the Bank, on the other hand, declined from year-ago level mainly due to the maturity of the P13.9 billion 6.3 percent fixed-rate bonds of the Bank in May 2021.
Trading and foreign exchange gains declined by 57 percent to P1.6 billion resulting mainly from limited trading opportunities in the market during the period.
As part of its continuing proactive approach to address potential delinquencies from the protracted impact of the pandemic, the Bank booked additional impairment provisions of P16.9 billion during the second quarter of the year, bringing the total provisions to-date to P19.0 billion, higher than the levels seen during the same period last year. As a result, the Bank's NPL coverage ratio increased to 60 percent from 43 percent as of end-December 2020.
Operating expenses, excluding provisions for impairment and credit losses, remained relatively flat year-on-year at P13.4 billion as spending was focused on more essential expenditures.
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Philippine National Bank