NET INCOME of Philippine Business Bank (PBB) rose in the second quarter on the back of higher interest earnings, with its first semester performance also climbing from a year ago.

In a disclosure to the local bourse on Tuesday, PBB said its net income came in at P180.6 million in the second quarter, up 1.5% from its P177.97-million bottom line in April-June 2016 and 13.1% higher than its first-quarter earnings.

For the first six months, the lender booked a P340.32-million net profit, also up slightly from the P340 million booked in the comparable year-ago period.

The Yao-led bank likewise reported a P422.7-million core income for the first semester, a fifth higher than the P355.1 million it booked a year ago.

PBB booked a double-digit increase in net interest earnings during the first six months of the year, fuelled by a surge in loans as a result of the bank’s reorganization. Net interest income grew to P1.4 billion in the six months ended June, jumping by 15.3% from the P1.2 billion recorded during the same period last year.

Loans and other receivables came in at P58.8 billion at end-June, up 14.2% from the P51.4 billion recorded at end-2016.

In a statement, PBB President and Chief Executive Officer Roland R. Avante attributed the robust loan growth to the bank’s “streamlined lending business.”

“We expect our full-year profitability numbers to more accurately reflect our true performance, especially given the accelerated growth of our loan portfolio,” Mr. Avante was quoted as saying in the statement, pointing out that the latest figures included one-time expenses for the bank’s reorganization activities.

The listed lender said further loan growth is expected as PBB caters to more small and medium-scale firms and other corporate clients, with its branch network growing to 152 nationwide.

Meanwhile, expenses came in at P1.13 billion in the first semester, up from P950.91 million in the comparable year-ago period.

Deposits also posted a 15.6% increase from a year ago to hit P61.3 billion, alongside an increase in the bank’s total resources to P73.7 billion from P63.9 billion previously, the bank told the Philippine Stock Exchange.

Meanwhile, in the second quarter alone, PBB’s net interest income was at P722.2 million, up 14.8% from the previous year’s P629.12 million. Less impairment losses, its net interest earnings came in at P692.2 million in the quarter ended June, up from P614.12 million a year ago.

Other income, such as trading gains, service charges, fees and commissions, was booked at P117.04 million in the three-month period, higher than the prior year’s P86.84 million.

Expenses in the second quarter came in at P553.4 million, higher than the previous year’s P447.2 million, its financial report showed.

Core income for the quarter ended June stood at P267.0 million, up 35.8% from the P196.6 million booked in the same period a year ago, on the back of the 119.7% increase in total other income exclusive of trading gains for the quarter, which offset the 16% increase in operating expense.

Return on equity decreased to 6.96% as of June from 7.41% at end-2016 as profit margin dropped to 16.92%. Net interest margin increased to 4.06% from 3.8%.

PBB’s assets reached P73.7 billion as of June, 4.9% higher compared to end-2016’s P70.3 billion.

Meanwhile, the bank’s capital adequacy ratio — a measure of a bank’s financial strength — stood at 16.39% at end-June, above the 10% regulatory requirement.

The bank’s asset quality also remained strong, with its non-performing loan (NPL) ratio coming in at 2.56% as of June from 2.52% at end-2016. Loan loss reserves to NPL ratio ended at 88.78% for the first half of 2017 versus 93.30% at end-2016.

Its loans-to-deposit ratio stood at 95.80% in the first half.

PBB shares rose to P14 apiece as of yesterday, up by 5.11% or 68 centavos from Monday’s P13.32 close. — M.L.T. Lopez

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