PHILIPPINE National Bank (PNB), the banking arm of the Lucio Tan Group, started the year on a high note with first-quarter net income rising by 10 percent to P5.3 billion from P4.8 billion previously.

Based on preliminary data disclosed on Thursday, core earnings grew by 7 percent to P12.9 billion from P12 billion as net interest income surged 12 percent to P11.7 billion from P10.5 billion.

The growth, said PNB, was mainly anchored on the combined impact of a loan portfolio expansion and improved yields that rose by an average of 47 basis points, aided by efforts to lower high-cost funding.

"This year is exciting for the bank as we embark on expanding our reach to the small and medium enterprises as well as in consumer lending," said Francis Albalate, PNB executive vice president and chief financial officer.

"We shall strengthen our relationships with our local businesses and retail customers by providing relevant services that will help them fulfill their financial objectives," he added.

PNB saw higher gains from trading, investment securities and foreign exchange businesses, earning a combined P522.3 million as of end-March compared to last year's P387.6 million.

The provision for impairment, credit and other losses was lower at P619.8 million from P1.6 billion, while operating expenses narrowed to P7.3 billion from P7.9 billion.

The bank closed the first three months of the year with total assets of P1.196 trillion, down 1 percent compared to the P1.2 trillion recorded at the end of December 2023.

Meanwhile, total liabilities and total equities stood at P999.4 billion and P196.6 billion, respectively.

In 2023, PNB reported netting P18 billion, up 55 percent from the P11.6 billion earned a year ago, following strong net interest income and lower credit provisions.

Lower provisions on distressed loans and other credit assets had driven last year's "healthier performance," the bank said, as markets rebounded from the pandemic and other adverse conditions.

Last year's performance demonstrated the bank's "efforts in upholding our vision of being among the top banks in terms of customer growth and satisfaction as well as return on equity," PNB President Florido Casuela earlier said.

PNB shares closed down 25 centavos, or 1.15 percent, to P21.45 apiece on Thursday amid a 0.81-percent decline for the benchmark Philippine Stock Exchange index.