Philippine National Bank's trading gains drop 55%

But this is offset by a 25% increase in net service fees.

According to Maybank Kim Eng, PNB turned in net income of PHP6.3b in 2015, up 15% and higher than our estimate of PHP5.8b and consensus forecast of PHP6.2b. Lending grew faster than expected at 18%, outpacing 3Q15’s 10% increase. Strong growth was seen across all sectors, boosting LDR to 74% from 71% in 2014. 

Here's more from Maybank Kim Eng:

Net interest income, which comprised 67% of total revenue, jumped 7% to PHP17.7b, in line with expectations. Interest income on loans rose 13% while deposit cost was contained at 7% growth on higher CASA funds.

Interest expense on other borrowings, however, increased 20% due to the USD150m three-year syndicated term loan issued in Apr 2015.

Net service fees and commissions improved 25% on higher fees generated from underwriting and credit-related transactions. This offset the 55% drop in trading gains to PHP574m.

Gain from sale of foreclosed assets was also higher 10% to PHP1.6b in 2015. PNB disposed of PHP5b of foreclosed assets at book value this year compared with PHP2.2b disposed in 2014.

Last year’s sales include PHP1b of Heritage Park memorial lots in 2Q15 and PHP1.2b in total of lots sold to sister company Eton Properties in 1Q15 and 4Q15.