Bank of the Philippine Islands said Thursday hit a historical high for nine-month net income on the back of sustained loan and interest margin growth and tempered provisions.
BPI, the country’s third largest lender by assets, said that January-September net profit rose 26 percent year-on-year to P38.6 billion, equivalent to 15.6 percent return on equity.
Nine-month revenue reached P100.9 billion, up 15 percent from the year-earlier period on double-digit gain in net interest income and higher net interest margin.
For the third quarter alone, BPI recorded net income of P13.5 billion, a 33 percent growth year-on-year, also the highest quarterly net income achieved in the past decade. This was boosted by the 18 percent jump in revenue to P35.3 billion, on the back of higher net interest income and non-interest income.
BPI reported a 25 percent increase in net interest income during the period to P76.8 billion, as average asset base expanded 8.1 percent and net interest margin widened 54 basis points to 4.07 percent.
The lender said the interest income growth was partly offset by the 6.6 percent decline in non-interest income to P24.1 billion due to the property sale gain recognized in the prior year. Excluding one-off gain, non-interest income would be higher by 16 percent or by P3.3 billion on account of higher fees from credit cards, bancassurance, various service charges, and trading gains.
Operating expenses for the nine-month period increased 21 percent to P48.6 billion, due to larger spending for manpower, technology, and marketing.
Cost-to-income ratio stood at 48.2 percent.
Asset quality slightly weakened from last year and the previous quarter, with non-performing loan ratio of 1.97 percent. Meanwhile, coverage remains adequate, with a 158.95 percent NPL coverage ratio.
Year-to-date, BPI booked provisions of P3 billion, 60 percent lower than the P7.5 billion recognized over the same period last year.
Total assets rose 7.2 percent to P2.7 trillion year-on-year, with return on assets at 1.95 percent.
Total loans of P1.7 trillion was 8.8 percent higher year-on-year, driven by loan growth in the corporate, credit card, and auto portfolios of 5.3 percent, 38 percent, and 22 percent, respectively.
Total deposits of P2.2 trillion also climbed 6.7 percent year- on-year, bringing the loan-to-deposit ratio to 80.2 percent. Total equity stood at P349.6 billion, with an indicative common equity Tier 1 ratio of 16.1 percent and a capital adequacy ratio of 17.0 percent, both well above regulatory requirements.
The 172-year-old BPI is the first bank in the Philippines and Southeast Asia.
