Philippine National Bank reported a 53 percent drop in net income to P11.4 billion for the first nine months of 2022 from P24.25 billion in the same period last year due to substantial one-time gains in 2021.

In a disclosure to the Philippine Stock Exchange, the bank said gross revenues fell 40 percent to P44.02 billion in the first nine months of the year from P73.22 billion in the same period of 2021.

The bank's nine-month net interest income increased by 4 percent year-on-year, driven by a 21 percent growth in interest income earned from its investment portfolio and other liquid placements, in the midst of the current rising interest rate environment.

This resulted in an improved net interest margin of 3.4 percent from 3.3 percent a year ago.

Earlier this year, PNB reported a P3.6 billion gain earned from the sale of an investment property during the second quarter, which further boosted the year-to-date net operating results of the Bank.

The nine-month operating net income is lower compared to the P26.4 billion in the same period last year, largely due to the one-off P33.6 billion gain from the property-for-shares swap transaction implemented in 2021.

Without the effect of this one-off transaction, the operating income of the bank showed growth of 14 percent year-on-year.

The Bank’s gross loan portfolio expanded to P638.3 billion as of end-September 2022, slightly up by 1 percent from the loan level last year as the Bank further stretched its lending to large corporates during the period.

Provisions set up on these loans are 97 percent lower than the amounts provided in the same period last year when the Bank was still continuing to build its loan loss reserves, particularly on accounts impacted by the pandemic.

Likewise, the Bank continued to build up its current and savings deposits, resulting in a modest 1 percent increase in total deposits from year-ago level, tempered by the Bank’s initiatives to further trim down high-cost time deposits, amid the rise in benchmark interest rates.

On the other hand, net fee-based income for the first three quarters contracted by 8 percent year-on-year, primarily due to reductions in credit-related and underwriting fees. The bank took advantage of the strong capital markets in 2021, closing good-sized deals which translated to higher underwriting fees.

Treasury-related income declined year-on- year owing to muted trading opportunities amid the global monetary tightening and hike in benchmark interest rates.

The Bank ended the third quarter of the year with total consolidated assets of P1.15 trillion, a percent higher than the year-ago balance on the back of growth in loans and treasury assets.

“PNB continues to be profitable as it showed improvements in efficiency pushing our momentum towards achieving our strategic priorities,” said PNB Acting President Florido Casuela.

He added that, “Our results indicate that we have the right strategy to deliver real value to our clients, our investors, and the overall economy in these challenging times.”