PNB’s H1 net income dips 65% due to higher loan loss provisions

Lucio Tan-led Philippine National Bank (PNB) saw its first half bottom line plunge by 65% as it set higher provisions for anticipated credit losses due to COVID-19 pandemic.

In a statement, PNB said its net income stood at P1.4 billion, a significant decrease from P4 billion profit posted in the same period last year.

Revenue, however, grew 24% to P23.6 billion in the period driven by continuous growth in lending and trading activities despite the COVID-19 pandemic.

PNB said it continued to consider the evolving economic impact of the uncertainties brought about by the COVID-19 pandemic.

“As a result, the bank booked additional impairment provisions of P5.1 billion during the second quarter of the year, bringing the total provisions to-date to P8.4 billion,” it said.

After said provisions, the net income for the January to June period amounted to P1.4 billion.

“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. As the uncertainties from the pandemic persist, we will continue to take a pragmatic approach on loan provisioning to proactively protect the bank’s balance sheet against potential credit losses,” PNB president and CEO Wick Veloso said.

“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.

Net interest income increased by 19% to P17.5 billion from year-ago level of P14.7 billion, on account of reduced high-cost deposits.

PNB sustained its growth in loan receivables, which now stand at P602.6 billion, up 1% year-on-year.

Deposit liabilities also expanded to P790.7 billion as of end-June 2020, a 2% increase from year-ago balance. —LDF, GMA News