PNB reports 33% rise in Q1 revenues, builds up loan reserves due to COVID 19
For the first quarter of 2020, Philippine National Bank (PSE: PNB) recorded total revenues of P12.4 billion, an increase of 33 percent compared to its performance in the same quarter last year, on back of solid growth in net interest income as well as non-interest income primarily gains from securities trading. Net profit before taxes and provisions for impairment improved by 77 percent year on year.
PNB’s net interest income increased by 25 percent to P8.8 billion on account of improved earnings from loans to corporate, commercial and small and medium enterprises, and other interest-earning assets. Loan receivables continued to register double-digit growth, which now stand at P651 billion as of end-March 2020, up by 10 percent from prior year. Deposit liabilities on the other hand increased by 6 percent to P791 billion versus March 2019 levels.
Non-interest income expanded by 58 percent resulting mainly from strong trading income spurred by favorable opportunities in the market.
Operating expenses, excluding provisions for impairment, were up by 13 percent from over the same period last year as robust revenue streams translated to higher business taxes and other business-related expenses.
After provisions, net income for the quarter declined by 29.7 percent to P1.3 billion from P1.9 billion for the same quarter last year. Mindful of the unprecedented uncertainties surrounding the economic impact of COVID-19, the bank decided to take a proactive approach in its provisioning. As a result, loan provisions reached P3.4 billion during the period, higher by P3.0 billion compared to the P346 million during the same period last year.
“PNB delivered a remarkable performance during the period. However, it was necessary to exercise extraordinary prudence during these uncertain times and aggressively build up the bank’s loan provisions due to the potential economic downturn which will adversely affect local businesses,” PNB President and CEO Wick Veloso said. “As we navigate through an extremely challenging business environment, the Bank’s focus for the rest of the year is to ensure uninterrupted service to its customers and make meaningful contributions on initiatives to revive the economy. This will require striking a balance between exploring business opportunities and effectively managing programs intended to relieve financial pressure on our customers while mitigating the increasing credit risk,” he added
Total consolidated assets stood at P1.1 trillion as of March 2020, higher by 6 percent from year-ago level driven by sustained momentum in its core lending and deposit-taking activities. As of end of March 2020, PNB’s total equity increased by P19 billion to P152 billion from last year’s levels, partly attributed to the Stock Rights Offering in July 2019. Common Equity Tier 1 Ratio was 13.80 percent and Capital Adequacy Ratio stood at 14.72 percent.
Bank On Wheels (BOW) brings banking to those most in need and in areas where accessibility to cash is limited. Since the start of the Enhanced Community Quarantine, PNB has deployed a number of BOWs serving many communities in Metro Manila, Rizal, Cavite, Pampanga, and Laguna. Everyday from 7:00 am to 6:00 pm, BOWs are stationed in various locations to serve those who experience difficulty in getting access to ATMs.
The Bank fully supported the Bayanihan To Heal As One law, providing its customers with payment extension for loans with payment due dates during the ECQ without incurring penalty fees and interest charges. For loans with auto-debit arrangements (ADA), payments will be implemented once the Enhanced Community Quarantine (ECQ) period is lifted. For loans covered by post-dated checks (PDCs), these PDCs were pulled out on its corresponding due dates to be processed after the ECQ.
Veloso said “It has been heartening to witness the dedication of my colleagues in PNB as financial first responders, keeping bank operations running, providing access to critical banking services through our branch network including our Bank On Wheels, reassuring customers during these difficult times, while supporting their own families and each other.”