PSE Circular for Brokers No. 427-99

March 8, 1999 PSE CIRCULAR FOR BROKERS NO. 427-99 March 5, 1999 MS . LUISA W . BUENAVENTURA Supervisor. Disclosure Department Philippine Stock Exchange, Inc. PSE Center, Exchange Road Ortigas Center, Pasig City Dear Ms. Buenaventura : This is in reply to your faxed message dated March 5, 1999 requesting for full disclosure on certain matters mentioned in the news article captioned "PNB sees return to profitability after capital hike which was published in today's issue of the Manila Bulletin. We would like to inform that The Bank generated a net interest income of P5.6 billion in 1998, from a total interest income of P22.6 billion, net of interest expenses of P16.6 billion. net income from regular operations was P1.1 billion, before taxes and provisions for probable losses. cdlex after the booking of an additional P6.4 billion in provisions for losses in December 1998, the Bank reported a net loss of P5.1 billion for the year The additional provisions brought the level of valuation reserve on loans to P10.3 billion as of December 31, 1998 net or the valuation reserve, the Loan Portfolio of the Bank amounted to P112 billion We hope this clarification will be sufficient for your purpose. Thank you Very truly yours , (SGD.) BENJAMIN P. PALMA GIL President and Executive Officer