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PNB shifts focus to SME, consumer loan portfolio

Posted on April 17, 2015

MANILA, April 17 (PNA) — The Philippine National Bank (PNB) has shifted focus from corporate to small and medium enterprises (SME) and consumer loan portfolios in an effort to beef up its income.

PNB bared this strategy to the local bourse after posting a five-percent increase in net income to PHP5.5 billion in 2014 despite the challenging conditions in the local financial markets that caused its trading gains to decline substantially by 72 percent to PHP1.3 billion.

It told the local bourse that interest income on loans and receivables grew by 16 percent to PHP15.2 billion amid focus shift.

In addition, PNB successfully reduced its interest expense by 23 percent to PHP3.6 billion as the Bank concentrated on generating low cost funds and paid off high cost liabilities, particularly with the redemption of its PHP6.7 billion high interest-bearing Long-Term Negotiable Certificates of Deposits (LTNCDs).

Net interest income grew by 23 percent to PHP16.9 billion, accounting for 64 percent of total operating income in 2014.

PNB’s operating income increased by 12 percent to PHP26.4 billion, augmented by other income excluding gains from securities trading which rose by 33 percent principally from the sale of PNB’s foreclosed assets.

Starting in the fourth quarter of 2014, PNB implemented an aggressive strategy in the disposal of its acquired properties through regional simultaneous public sealed biddings in all domestic branches which yielded higher gains for the Bank.

The Bank also successfully raised PHP11.6 billion in fresh capital via a stock rights offering in a bid to strengthen the its capital position and prepare for the higher minimum capital requirements of Basel III. (PNA)

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