PNB posts lower profit due to higher loan provisions
Philippine National Bank (PNB) reported a 65 percent drop in net income to P1.4 billion in the first semester of 2020 from P4 billion in the same period last year due to higher provisions.
In a disclosure to the Philippine Stock Exchange, PNB said it continues to consider the evolving economic impact of the uncertainties brought about by the COVID-19 pandemic.
As a result, the Bank booked additional impairment provisions of P5.1 billion during the second quarter of the year, bringing the total provisions to-date to P8.4 billion.
“PNB is proactively implementing measures to mitigate any risks to its portfolio brought about by the pandemic and to further strengthen its security positions,” the bank said.
It registered total revenues of P23.6 billion for the first half of 2020, 24 percent higher compared to its revenues for the same period last year, driven by continuous growth in lending and trading activities despite the COVID-19 pandemic.
Net profit before provisions for impairment and taxes improved by 70 percent year-on-year.
PNB’s net interest income increased by 19 percent to P17.5 billion from year-ago level of P14.7 billion, on account of reduced high-cost deposits.
The bank sustained its growth in loan receivables, which now stand at P602.6 billion, better by 1 percent from prior year.
Deposit liabilities also expanded to P790.7 billion as of end-June 2020, a 2 percent increase from year-ago balance.
As favorable market opportunities continue during the second quarter of 2020, PNB recorded further improvements in trading securities gains, which now amounted to P3.2 billion, up by 78 percent year-on-year.
“PNB’s performance for the first half of 2020 demonstrates the depth and resiliency of its core business as the bank sustained its growth momentum, built on a solid business franchise with continued and strong support from its customers,” PNB President and CEO Wick Veloso said.
He added that, “As the uncertainties from the pandemic persist, we will continue to take a pragmatic approach on loan provisioning to proactively protect the bank’s balance sheet against potential credit losses.” “For the rest of the year, we will continue to focus on tactical strategies ensuring uninterrupted service to its customers, strengthening its liquidity and capital positions and enabling the bank to actively participate in reviving the economy.” Veloso added.