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Issuer Flash: Philippine National Bank

Issuer: Philippine National Bank | Document: Issuer Flash | Date: 2026-08-05 | Event: 1h 2026 Results

Report date: 2026-08-05 Event date: 2026-07-24 Event title: 1H 2026 Consolidated Key Financial Information

1. Flash Conclusion

Philippine National Bank's unaudited first-half 2026 key financial information is modestly supportive of its existing senior-credit view. Consolidated net income rose to PHP14.6bn from PHP12.5bn in the first half of 2025, while net interest income increased to PHP27.6bn from PHP25.8bn. The result supports internal capital generation and reported accounting equity, and follows the positive earnings direction identified in the latest issuer summary.

The balance-sheet read-through is more mixed. Loans and receivables increased by 1.2% from end-2025 to PHP748.7bn, whereas deposit liabilities declined by 2.8% to PHP1.032tn and total assets fell by 1.8% to PHP1.350tn. These changes do not, on their own, establish funding stress: deposits remain the largest disclosed funding line, while the filing provides no deposit-composition, liquidity-ratio or maturity data. They do, however, make the next confirmation of deposit stability and funding cost important as lending continues to grow.

The disclosure does not change the existing conclusion that PNB's senior credit is supported by its pre-existing deposit-franchise assessment and earnings generation, while remaining constrained by asset-quality and liquidity-detail gaps. The Form 17-C contains no updated NPL, provision-coverage, regulatory-capital, LCR/NSFR, rating or bond-terms information. It reports accounting equity, but does not permit an assessment of regulatory-capital adequacy or a change in loss-absorption capacity. It would therefore be premature to infer an improvement in those risk dimensions from the earnings release alone.

2. What Was Announced

On 24 July 2026, PNB filed a PSE EDGE Form 17-C furnishing consolidated key financial information for the semester ended 30 June 2026. The official attachment presents unaudited consolidated statements of condition at 30 June 2026 and consolidated income statements for the first half and second quarter, with 2025 comparatives.

First-half net income was PHP14.6bn, 16.8% above PHP12.5bn in the comparable 2025 period, calculated from the disclosed figures. Net interest income increased by 7.2% to PHP27.6bn, and net service fees and commission income increased by 16.9% to PHP3.1bn. Second-quarter net income was PHP8.2bn, compared with PHP6.4bn a year earlier. The disclosure also reported a reversal of impairment, credit and other losses of PHP831mn for the first half, compared with a PHP342mn provision in the prior-year period. This is a favourable earnings contributor, but the filing does not provide the asset-quality or coverage detail required to judge its recurrence.

At 30 June 2026, consolidated deposits were PHP1.032tn and loans and receivables were PHP748.7bn. Bonds payable were PHP34.1bn. Total equity was PHP244.9bn, including PHP240.8bn attributable to equity holders of the parent company. The increase in retained surplus to PHP142.5bn from PHP134.6bn at end-2025 is consistent with first-half earnings retention, while valuation reserves also moved during the period; the filing does not explain capital policy or regulatory-capital effects.

3. Credit Read-Through

The first-half income result is a positive near-term signal for a bank creditor because recurring net interest income, fees and reported net income all increased year on year. This supports PNB's capacity to absorb ordinary operating costs and build reported accounting equity through retained earnings, but does not establish regulatory-capital adequacy. The comparison should nevertheless be read with care. Other income increased to PHP4.1bn from PHP1.9bn, and the reversal of impairment-related losses contributed to the earnings outcome. Without updated NPL, Stage 2/Stage 3, credit-cost and provision-coverage metrics, the filing cannot show whether the improvement reflects a durable reduction in credit risk or merely a period-specific provisioning outcome.

The 30 June balance sheet is consistent with deposits remaining central to PNB's disclosed funding profile. However, the combination of a PHP8.7bn increase in loans and a PHP29.6bn decrease in deposits since year-end means that the next quarterly filing should be used to test whether this is ordinary balance-sheet timing or a sustained change in funding mix. A reduction in investment securities to PHP323.8bn from PHP358.5bn and an increase in securities held under agreements to resell to PHP84.8bn from PHP72.9bn also show portfolio movement, but no liquidity-ratio or duration information is disclosed. The PHP34.1bn bonds-payable line does not quantify PNB's full non-deposit or market-funding profile. Bondholders should not equate these accounting-line movements with either stronger or weaker liquidity without the missing primary disclosures.

For senior creditors, the event is directionally constructive because income and reported accounting equity rose, but it does not permit a reassessment of regulatory loss-absorption capacity, funding resilience or security-level recovery. In particular, this flash does not establish CET1, total capital, risk-weighted assets, the ranking, maturity, currency, covenant or regulatory loss-absorption terms of any PNB instrument. The prior distinction between senior claims and subordinated or regulatory-capital instruments remains necessary.

4. Key Numbers

PHP mn unless stated 1H 2026 / 30 Jun 2026 1H 2025 / 31 Dec 2025 Change Credit read-through
Net interest income 27,613 25,766 +7.2%* Higher core income supports earnings capacity.
Net service fees and commission income 3,062 2,620 +16.9%* A positive non-interest-income contribution.
Net income 14,613 12,517 +16.8%* Supports internal capital generation, subject to asset-quality detail.
Loans and receivables 748,711 740,018 +1.2%* Lending expanded modestly from year-end.
Deposit liabilities 1,031,635 1,061,203 -2.8%* Deposit stability and mix require the next check.
Bonds payable 34,055 33,278 +2.3%* The disclosed bonds-payable line is small relative to deposits; it does not quantify total market funding.
Total equity 244,918 240,280 +1.9%* Reported accounting equity increased; regulatory-capital implications are not disclosed.
Total assets 1,350,064 1,374,834 -1.8%* Balance-sheet composition changed during the period.

* Calculated from official PSE EDGE disclosed values. First-half income items compare with first-half 2025; balance-sheet items compare with 31 December 2025.

5. What To Watch Next

The next primary financial filing should be used to confirm whether deposit movement stabilises and whether loan growth remains matched by low-cost and sufficiently diversified funding. The key missing risk indicators are gross and net NPLs, credit costs, provision coverage, Stage 2/Stage 3 exposures, sector and large-name concentrations, CET1 and total capital ratios, risk-weighted assets, LCR/NSFR, and the composition, currency, maturity and funding cost of non-deposit and market funding.

The next update should also obtain original documentation for PNB's senior, foreign-currency, subordinated and regulatory-capital instruments before applying this issuer-level flash conclusion to any specific bond. The Form 17-C has no rating action or security-terms update, so no conclusion should be drawn on ranking, loss absorption or refinancing risk beyond the issuer-level balance-sheet information disclosed here.

6. Sources