Taipan Lucio Tan’s Philippine National Bank (PNB) reported a 17 percent increase in first-half net income to ₱14.6 billion as lower deposit costs and expanding loan demand bolstered core revenue.

In a disclosure to the Philippine Stock Exchange, the bank said net income rose from ₱12.5 billion in the same six-month period a year earlier. The earnings growth pushed return on equity, a key measure of profitability, to 12.1 percent from 11.4 percent a year ago.

Operating revenue expanded by ₱3.3 billion in the first six months of 2026. Net interest income increased seven percent, lifted by a 12 percent gain in interest from loans and a 24 percent reduction in deposit expenses. Fee-based income grew 17 percent, led by higher bancassurance earnings.

Credit costs continued to ease as non-performing loans declined. The bank’s gross NPL ratio fell to 4.2 percent from 5.5 percent a year earlier on the back of sustained improvements in asset quality and a healthier lending portfolio.

Total assets reached ₱1.35 trillion as of June 2026, up 4.4 percent from ₱1.29 trillion in the comparative period of 2025. Total loans grew 10 percent year-on-year to ₱764 billion from ₱696 billion as the lender deployed deposits more efficiently, raising its loan-to-deposit ratio.

Corporate and commercial lending rose 11 percent, while consumer loans surged 21 percent. Housing loans accounted for roughly 90 percent of the expansion in consumer borrowing during the period.

“About 90 percent of consumer loan expansion during the first half of the year was in the secured lending area, particularly housing loans,” Francis B. Albalate, PNB chief financial officer, said in the filing. “We are not seeing any deterioration in the portfolio’s credit quality despite the current market environment.”

Operating efficiency improved, with the cost-to-income ratio easing to 48.7 percent from 49.3 percent a year ago. Branch updates and cost-control measures helped offset continued business investments, driving positive operating leverage.

Capital cushions remained well above regulatory mandates. PNB posted a Common Equity Tier 1 ratio of 19.4 percent and a Capital Adequacy Ratio of 20.3 percent as of June.

“As PNB celebrates its 110th anniversary, our strong first-half performance highlights the strength and resilience of our franchise,” Edwin R. Bautista, PNB chief executive officer, said. “We delivered improved profitability, increased our loans, and significantly reduced our NPL ratio—demonstrating the quality of our balance sheet and disciplined execution.”

Bautista added that return on assets also improved alongside equity returns, underscoring a stronger earnings profile despite broader market volatility.

The lender is also advancing an artificial intelligence transformation, having trained more than 90 percent of its workforce in AI technology as part of its operational strategy. (James A. Loyola)