Spin-off of real estate assets allows PNB to reach a profit of P31.7-B

Taipan Lucio Tan’s Philippine National Bank (PNB) saw its profits increase more than 12 times last year after recognizing gains from the sale of coveted real estate assets to a subsidiary.

PNB said in a statement Wednesday that even without those gains, “core banking” revenue rose 2% to 40.1 billion pesos in 2021 thanks to higher commissions and underwriting deals, while interest income growth was relatively stable.

PNB ended the year with a consolidated net profit of P31.7 billion compared to P2.6 billion in 2020.

This was due to the gain of 33.2 billion pesos from the exchange of property for shares which resulted in the transfer of land assets to PNB Holdings Corp.

These would include the 10 hectare corporate headquarters along Macapagal Avenue, the former Allied Bank building on Ayala Avenue and the 8,000 square meter prime land seized from musician Ramon “RJ” Jacinto.

“PNB continued to be profitable and was able to provide uninterrupted banking services to customers and the general public during the pandemic,” PNB President and CEO Wick Veloso said in the statement.

“We have continued to play our part in supporting customers and employees by implementing safer banking processes and services amid the ongoing pandemic situation,” he added.

PNB also recorded lower provisions for impairment and credit last year. It also reduced operating expenses and reduced non-performing loans or debts, which were difficult to collect amid the COVID-19 pandemic.

It said in the statement that it sold some of those bad debts with “gross pre-sale book values” of 5.5 billion pesos, resulting in a gain on sale of 767 million pesos.

Meanwhile, earnings were driven by 43% growth in net service charges and commissions, followed by “significant” gains in its bancassurance and underwriting deals. PNB also collected royalties on the use of its digital platform.

Interest income reached 34.8 billion pesos last year, while PNB maintained its net interest margin of 3.2%. Its loan portfolio increased by 1% to reach 607 billion pesos, while total deposits increased by 0.5% to reach 894.9 billion pesos.

—Miguel R. Camus

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