PNB net earnings rise by 56% in 2023

PHILIPPINE National Bank’s (PNB) net profit rose by 55.9% in 2023 on the back of higher interest income and lower loan loss provisions, it said on Monday.

The lender’s attributable net income stood at P17.98 billion last year, up from P11.53 billion a year prior, its financial statement disclosed to the stock exchange showed.

“Net core banking income, which excludes gains on sale of acquired properties, climbed by a record 156% year on year,” PNB said in a statement.

This translated to a return on equity of 9.95% and a return on assets of 1.53%, up from 7% and 0.99% previously.

Net interest income went up by 19.46% to P44.59 billion last year from P37.33 billion previously.

“The bank’s net interest margin widened to 4.2% in 2023, compared to the 3.6% in the previous year, as the bank continued its focus on the efficient deployment of funds,” PNB said.

Meanwhile, other operating income went down to P7.44 billion from P9.18 billion.

“Trading and foreign exchange gains at P1.8 billion rose by more than 4 times year on year as the bank was able to capitalize on market opportunities, despite the limited market liquidity and rising interest rate environment in 2023. The bank also offloaded certain high-value foreclosed properties as it continues to aggressively dispose of nonperforming assets,” PNB said.

Operating expenses inched up by 0.22% to P28.43 billion from P28.37 billion amid “prudent spending despite the continued business growth.”

As a result, its cost-to-income ratio was at 49.56%, improving from 54.47% previously.

PNB’s gross loans grew by 5% to P642 billion at end-2023 as it lent more to the commercial sector and small and medium firms.

The group’s gross nonperforming loan (NPL) ratio went down to 6.26% from 6.34% in 2022. Meanwhile, NPL coverage went up to 88.53% from 88.52%.

It set aside 17.71% lower provisions at P5.92 billion in 2023 from P7.2 billion in 2022.

“The healthier performance in 2023 was augmented by lower provisions on distressed loans and other credit assets as the market continued to rebound during the year from the lingering effects of the pandemic and other adverse market conditions in recent years,” PNB said.

On the funding side, total deposits rose by 6.51% to P927.97 billion from P871.23 billion.

“Likewise, the bank continued to build up its current and savings accounts deposits, growing by 4% year on year, and accounting for 83% of the bank’s total deposits as of end-2023,” it said.

Its net loan-to-deposit ratio was at 65.11% last year, down from 66.36% in 2022.

PNB’s assets rose by 5.71% to P1.21 trillion from P1.15 trillion.

Total equity likewise grew by 12.5% to P191.15 billion from P169.91 billion.

The bank’s common equity Tier 1 ratio and capital adequacy ratio stood at 16.85% and 17.7%, respectively, up from 14.58% and 15.38% previously.

PNB’s shares went up by 12 centavos or 0.63% to end at P19.28 apiece on Monday. — AMCS