The Philippine National Bank (PSE: PNB) registered a consolidated net income of P5.4 billion for the first six months of 2018, double its earnings of P2.7 billion for the same period last year. The 50% growth in total operating income provided the momentum for the strong performance as core income significantly increased combined with higher non-recurring revenues.
Comprising almost two-thirds of total operating income, the Bank’s net interest income increased by 27% to P13.1 billion from year-ago level of P10.3 billion, driven by higher loan volumes and improving net interest margins. Likewise, net service fees and commission income reached P1.68 billion, P61 million better than year-ago level, boosted by improvements in credit, deposit, and bancassurance fees which offset the lower underwriting and investment banking revenues owing to the lackluster activities in the capital markets during the period. Trading and foreign exchange gains, however, were down to P795 million arising from muted trading opportunities brought about by the continuing upward movement of interest rates. The Bank booked higher net gains on disposal of foreclosed properties at P4.4 billion during the period as a result of its continuing strategy of reducing non-earning assets. Excluding these non-recurring gains on the sale of foreclosed assets, the growth in total operating income remains high at 19% year-on-year.
Operating expenses, excluding provisions for impairment and credit losses, grew 18% over the same period last year, as strong revenue growth translated to higher business taxes and other business-related expenses. Without taxes and licenses, operating expenses increased by only 12%. The Bank also set aside provisions for impairment and credit losses amounting to P1.2 billion for the first half of 2018 in line with its prudent provisioning policy to maintain the quality of its loan portfolio and in compliance with new accounting standards.
As of end of June 2018, PNB's total consolidated resources stood at P876.2 billion, up 6% compared to June 2017 balances, while total equity increased by P10.4 billion to P124.3 billion from last year’s levels. The Bank expanded its loan portfolio to P529.6 billion, up 16% compared to end-June 2017 level, while total deposits increased year-on-year by 8% to P672.2 billion.Net non-performing loans (NPL) ratio was at 0.30% while NPL coverage remained more than adequate at 132%. Common Equity Tier 1 Ratio was 14.4% and Capital Adequacy Ratio stood at 15.1%.
PNB recently marked its 102nd year in business with several innovative product offerings. The PNB Mobile Banking App was enhanced and now enables credit cardholders to conveniently keep track of their PNB credit card accounts whenever and wherever they are. The Bank also introduced the PNB-PAL Mabuhay Miles Debit Mastercard which allows clients to earn points when shopping or dining, and to convert points to Mabuhay Miles. Cardholders can also enjoy 5% discount on select PAL international flights when they book online. PNB also offers a wide selection of Unit Investment Trust Funds (UITFs) suited for clients’ financial goals. These funds are managed by professional and experienced fund managers and are invested in various financial instruments such as government securities, bonds, commercial papers, and deposit products. Clients can also view their UITF portfolio through the PNB Mobile Banking App.