Philippine National Bank (PNB) saw its net earnings drop in the first quarter as it set aside bigger loan provisions to prepare for the impact of the coronavirus disease 2019 (COVID-19).

In a statement on Tuesday, PNB said its net income fell 29.7% year on year to P1.3 billion in the first quarter from P1.9 billion in the first three months of 2019.

“Mindful of the unprecedented uncertainties surrounding the economic impact of COVID-19, the bank decided to take a proactive approach in its provisioning,” PNB said.

With this, the bank’s loan provisions during the quarter stretched to P3.4 billion, higher by P3 billion compared to the P346 million in the same period last year.

Net profit before taxes and provisions for impairment improved by 77% year on year.

Total revenues of the bank grew 33% to P12.4 billion, supported by an increase in its net interest income and non-interest income mainly from securities trading.

PNB’s net interest income climbed by 25% to P8.8 billion buoyed by improved earnings from loans to corporate, commercial and small and medium enterprises, and other interest-earning assets.

Meanwhile, non-interest income surged by 58%, bolstered by strong trading income.

The bank’s operating expenses, excluding provisions for impairment, jumped by 13% on the back of stronger revenue streams that resulted in higher business taxes and other business-related expenses.

Loan receivables went up by 10% to P651 billion as of end-March 2020. Meanwhile, deposit liabilities increased by six percent to P791 billion.

The lender’s assets as of end-March grew by six percent to P1.1 trillion supported by its core lending and deposit-taking activities.

Meanwhile, PNB’s total equity increased by P19 billion to P152 billion, partly attributable to its stock rights offering in July 2019. Common equity Tier 1 ratio was at 13.8% while capital adequacy ratio stood at 14.72%, both beyond the regulatory minimum.

The Tan-led bank’s shares ended at P22.25 apiece on Tuesday, down by 2.63% or 60 centavos from its previous close. — L.W.T. Noble