Philippine National Bank (PNB) reported a 17 percent increase in net income for the first half of 2026 to P14.6 billion, up from P12.5 billion a year earlier, driven by higher lending, stronger fee-based income and continued improvement in asset quality. The stronger earnings lifted the bank's return on equity to 12.1 percent from 11.4 percent in the same period last year.

Operating revenue increased by P3.3 billion during the six-month period, with net interest income rising 7 percent as interest income from loans grew 12 percent while the cost of deposits declined 24 percent. Fee-based income also expanded 17 percent, led by a significant increase in bank assurance revenue.

The bank said credit costs continued to decline amid sustained improvements in asset quality and a healthier loan portfolio. Its gross non-performing loan (NPL) ratio improved to 4.2 percent from 5.5 percent a year earlier.

Total assets increased 4.4 percent year on year to P1.35 trillion from P1.29 trillion, supported by growth in the loan portfolio. Total loans expanded 10 percent to P764 billion from P696 billion as the bank improved the utilization of its deposit base, resulting in a higher loan-to-deposit ratio than a year earlier. Corporate and commercial loans rose 11 percent, while consumer loans grew 21 percent.

PNB Chief Financial Officer Francis B. Albalate said about 90 percent of the growth in consumer lending during the first half came from secured loans, particularly housing loans.

"About 90 percent of consumer loan expansion during the first half of the year was in the secured lending area, particularly housing loans. We are not seeing any deterioration in the portfolio's credit quality despite the current market environment," Albalate said.

PNB President and Chief Executive Officer Edwin Bautista said the improvement in return on equity and return on assets underscores the bank's stronger earnings profile.

"We delivered improved profitability, increased our loans and significantly reduced our NPL ratio, demonstrating the quality of our balance sheet and disciplined execution," Bautista said.

"Despite market volatility, PNB remained resilient, supported by a strong capital position and prudent risk management. As we continue our role in nation-building, we are also advancing our AI transformation journey, with more than 90 percent of our employees trained in artificial intelligence, reinforcing our commitment to responsible AI governance, innovation and a future-ready workforce," he added.

The bank's cost-to-income ratio improved to 48.7 percent from 49.3 percent a year earlier, reflecting better expense management despite higher business volumes. PNB said operating expenses continued to reflect investments in the business, while efficiency initiatives and improvements in branch operations supported better operating leverage.