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Philippines: Rate hikes boost PNB earnings
MANILA, Philippines — Interest rate hikes, injected by the Bangko Sentral ng Pilipinas to tame inflation, boosted Philippine National Bank’s earnings in 2022.
In a disclosure sent to the Philippine Stock Exchange on Monday, PNB noted its net income rose 19% year-on-year to P11.6 billion in 2022. Net interest income inched up 7% on-year to P37.3 billion in the same period as it reaped the benefits of higher borrowing costs.
The key rate currently stands at 6%, after the BSP increased its key policy rate by 400 basis points since May last year to combat consumer price growth. Rate hikes typically take 12 to 18 months before it seeps into the domestic economy.
PNB also raked in gains from forex transactions, which ballooned 116% on-year to P1.6 billion in 2022. This haul tempered trading losses last year, which amounted to P1.3 billion as the bank suffered from higher interest rates set by central banks everywhere.
“PNB improved its efficiency and profitability amidst challenging conditions and economic headwinds,” said PNB acting president Florido Casuela.
Operating expenses rose 8% year-on-year, as PNB noted taxes on its property sales and higher amortization pushed costs up.
PNB’s gross loan portfolio dipped 3% on-year to P613.6 billion in 2022, on account of PNB speeding up “collection of short-term loans with minimal profitability and re-direct new loan grants to essential sectors that thrive in the new norm.”
The publicly-listed bank’s capital adequacy ratio stood at 15.38% while its common equity tier 1 ratio amounted to 14.58% in 2022.
Shares in PNB closed trading flat on Monday at P18.72 apiece. — Ramon Royandoyan
Source: https://www.philstar.com/business/2023/03/20/2253088/rate-hikes-boost-pnb-earnings