THE Philippine National Bank (PNB) was able to grow its net earnings by 17 percent to P9.6 billion in 2018, the bank reported on Monday.
PNB’s net profit was 17 percent more than the P8.2-billion net income it made in 2017, owing largely to the bank’s stronger core business.
In particular, PNB’s total operating income was up 20 percent to P38.9 billion from its year-ago level, which the bank attributed to increases in core revenues as well as gains from asset disposals.
The bank’s net interest income reached P27 billion, 23 percent higher than the previous year. This was driven by a 19-percent expansion in gross loans and the widening of net-interest margin during the year.
Its net service fees and commission also grew by 9 percent largely due to improvements in deposit, trade, and credit card-related fees, as well as bancassurance income which were partly offset by the decline in underwriting fees.
Also keeping the bank’s net profit on the greens were its gains in the disposal of its assets. PNB said its net gains from sale of acquired assets increased to P5.9 billion, compared to last year’s P3.9 billion.
The higher total revenues of the bank more than covered its operating expenses during the year as it grew by 13 percent, excluding provisions for impairment and credit losses in 2018.
The bank said the bulk of the growth in operating expenses were from higher taxes. Without taxes and licenses, core operating expenses grew by 8 percent.
PNB’s assets grew 18 percent as funded primarily by deposits, consisting mostly of current and savings account deposits. PNB said this is consistent with their continued focus on generating low-cost funds and other stable sources of funding.
The bank also reported sustained asset quality, with nonperforming loan (NPL) ratios of 0.34 percent net of valuation reserves and 1.76 percent at gross.
NPL coverage stood at 156.87 percent. PNB’s consolidated risk-based capital adequacy ratio continued to exceed the minimum regulatory requirement of 10 percent, with CAR at 14.35 percent and Common Equity Tier 1 ratio at 13.55 percent by end-2018.