THE CENTRAL BANK has cleared Philippine National Bank’s (PNB) planned investment in PNB Holdings Corp. (PHC)

In particular, the Bangko Sentral ng Pilipinas approved PNB’s request for “temporary exemption from prudential limits on its equity investments in PHC”.

“This is part of the bank’s plan to realize the market value of its prime properties and reduce its low-earning assets to strengthen its financial position…” PNB said in a filing on Monday.

PNB in September said it will subscribe to 466.77 million shares of PHC at a price of P100 apiece or P46.7 billion in total. This is equivalent to 99.46% of the outstanding shares of PHC. This will be in exchange for certain real estate properties of the bank.

Bloomberg reported last year that PNB is seeking to dispose of some of its prime properties such as a 10-hectare property along Manila Bay, and Makati properties including an office building and a prime lot, according to a source.

In a separate filing on Monday, the bank said it received on Jan. 21 the first installment payment from Alliedbankers Insurance Corp. for the bank’s nonlife insurance arm.

“The sale of PNB General Insurers Co., Inc. shares is consistent with the bank’s objective to exit the nonlife insurance business being a non-core undertaking,” PNB said in the disclosure.

The acquisition was approved by the Insurance Commission in December. PNB earlier said the sale will be settled through a P100.16-million payment in January and two P450.7-million payments on March 21, and June 21.

“The proceeds of the transaction will be used for general corporate purposes,” the bank said.

PNB’s net profit rose 2.9% year on year to P2.508 billion in the third quarter of 2020. However, its nine-month profit slumped 39% to P3.896 billion from P6.504 billion as the bank boosted its loan loss provisions amid the pandemic.

Shares in PNB closed at P27.65 apiece on Monday, up by 15 centavos or 0.55% from its previous finish. — L.W.T. Noble