AS the economic recession continues to negatively impact Philippine National Bank’s (PNB) bottom line, its top official said they are continuing efforts to temper the increasing bad loans.
PNB President Jose Arnulfo A. Veloso, in an online media briefing last week, said that the bank is coordinating with borrowers to cushion the adverse impact of the ongoing crisis.
“The bank continues to proactively work with its customers and other stakeholders to mitigate the impact of the pandemic to its loan portfolio and other credit exposures,” Veloso told reporters.
The Tan-led bank set aside loan loss reserves of P9 billion in the first nine months, which is six times more than it booked last year for the same period.
This resulted in the bank’s net income dipping by around 39 percent to P3.87 billion for the period from last year’s P6.34 billion.
Before credit provisions and taxes, PNB’s 9-month operating profits soared by 42 percent to P14.1 billion on the back of robust core businesses.
Net interest income spiked 12 percent to P26.2 billion for the period, supported by lower funding costs.
Net trading and securities from January to September jumped by 227 percent to P3.4 billion because of favorable market opportunities, the bank said.
“Loans and receivables as of end-September 2020, however, declined from 2019 year-end level as the Bank focused on strengthening its liquidity position,” the PNB said in a statement. “To remain resilient during the pandemic, the bank fortified its liquidity management and invested most of the available funds in short-term and more liquid placements.”
According to PNB’s quarterly report, its loan portfolio dropped by 12.28 percent to P577.1 billion as of end-September from last year’s P657.92 billion.
Total deposit liabilities, meanwhile, stood at P738.07 billion in the January-September period, which is 10.65 percent lower than P826.05 billion in the last year.
The bank’s capital adequacy ratio and common equity tier 1 stood at 16.40 percent and 15.67 percent, respectively, as of end-September.
“For the remaining months of the year, the bank will focus on tactical strategies aimed at strengthening its liquidity and capital positions and improving operational efficiencies to enable the bank to actively participate in reviving the economy and assist its customers in rebuilding their businesses,” Veloso concluded.