Philippine National Bank (PNB) ended the first half with a 65-percent plunge in its net income as it recognized further provisions for impairment, credit and other losses.
The Tan-led bank reported that its profits reached P1.4 billion in the first semester, which is substantially reduced from the P4 billion it notched in the previous year for the same period.
Total revenue, however, surged by 24 percent to P23.6 billion on the back of growth in lending and trading activities.
“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 Jose Arnulfo A. Veloso said in a statement on Tuesday.
Topline figures were marred by the surge in reserves, PNB said, noting that it was preparing for the uncertainties caused by the pandemic. The bank registered an additional P5.1-billion impairment buffer in the second quarter, bringing the year-to-date total to P8.4 billion.
Veloso said that the bank would continue its “pragmatic approach” in setting up loan provisions to shield its balance sheet against potential credit losses.
The bank said that because of lower high-cost deposits, net interest income for the period climbed by 19 percent to P17.5 billion from last year’s P14.7 billion.
As of end-June, its loan portfolio and deposit liabilities were flat at P602.6 billion and P790.7 billion, respectively.
Trading securities gains jumped by 78 percent to P3.2 billion in the first half, thanks to “favorable market opportunities” in the second quarter, PNB said.
Higher business taxes and other business-related costs lifted operating expenses—excluding provisions for impairment and credit losses—to P13.4 billion, showing 2-percent uptick as compared last year.
Capital as of end-June stood at P154.3 billion, which is 13-percent higher than last year’s P136 billion, the bank said. This brought the bank’s capital adequacy ratio and common equity tier 1 ratio to 15.86 percent and 14.99 percent, respectively.
“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.
PNB said that nearly all of its branches are now open to serve its clients. It said only an average of 51 percent of its branch network in April and May was open on a rotational basis and shortened banking hours.