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PNB net income in Q1 down 29.7% on higher loan loss buffer
By TED CORDERO, GMA News Philippine National Bank (PNB) posted a double-digit decline in its bottom line during the first quarter of 2020 on the back of higher provisions set aside for potential credit losses amid the COVID-19 pandemic.
In a disclosure to the Philippine Stock Exchange on Wednesday, PNB said its net income for the January to March period stood at P1.3 billion, down 29.7% from P1.9 billion year-on-year.
This after the Lucio Tan-led lender hiked its loan provisions to P3.4 billion from P346 million a year earlier, considering “the unprecedented uncertainties surrounding the economic impact of COVID-19.”
Total revenue amounted to P12.4 billion, up 33% from a year earlier on the back of solid growth in net interest income as well as non- interest income primarily gained from securities trading.
Net interest income grew 25% to P8.8 billion on account of improved earnings from loans to corporate, commercial and small and medium enterprises, and other interest-earning assets.
Loan receivables continued to register double-digit growth, which stood at P651 billion as of end-March 2020, up 10%.
Deposit liabilities increased by 6% to P791 billion year-on-year.
Non-interest income rose 58% resulting mainly from strong trading income spurred by favorable opportunities in the market.
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“PNB delivered a remarkable performance during the period. However, it was necessary to exercise extraordinary prudence during these uncertain times and aggressively build up the bank’s loan provisions due to the potential economic downturn which will adversely affect local businesses,” PNB president and CEO Wick Veloso said.
“As we navigate through an extremely challenging business environment, the Bank’s focus for the rest of the year is to ensure uninterrupted service to its customers and make meaningful contributions on initiatives to revive the economy. This will require striking a balance between exploring business opportunities and effectively managing programs intended to relieve financial pressure on our customers while mitigating the increasing credit risk,” Veloso added.
Total consolidated assets stood at P1.1 trillion, up 6% from year-ago level driven by sustained momentum in its core lending and deposit- taking activities.
Since the start of the enhanced community quarantine, PNB said it has deployed a number of bank-on-wheels (BOW) serving many communities in Metro Manila, Rizal, Cavite, Pampanga, and Laguna.
Everyday from 7:00 a.m. to 6:00 p.m., BOWs are stationed in various locations to serve those who experience difficulty in getting access to ATMs.
The bank said it fully supported the Bayanihan To Heal As One law, providing its customers with payment extension for loans with payment due dates during the ECQ without incurring penalty fees and interest charges.
For loans with auto-debit arrangements (ADA), payments will be implemented once the Enhanced Community Quarantine (ECQ) period is lifted. For loans covered by post-dated checks (PDCs), these PDCs were pulled out on its corresponding due dates to be processed after the ECQ, PNB said.
“It has been heartening to witness the dedication of my colleagues in PNB as financial first responders, keeping bank operations running, providing access to critical banking services through our branch network including our BOWs, reassuring customers during these difficult times, while supporting their own families and each other,” Veloso said.—AOL, GMA News