BANK OF THE Philippine Islands (BPI) booked a P23.88-billion net profit in 2021 as the decline in its loan loss buffers and higher fee income offset lower interest earnings.

The bank’s net income was up by 11.5% from a year earlier, it said in a filing with the local bourse on Monday.

This translated to a return on equity of 8.4%, while return on assets stood at 1.1%.

For the fourth quarter alone, BPI’s net income improved by 51.2% year on year to P6.4 billion, the bank said.

BPI’s net interest income in 2021 fell by 3.7% year on year to P69.58 billion from P72.3 billion. This was dragged by its net interest margin, which dropped by 19 basis points to 3.3% due to lower yields across most loan portfolios and treasury assets.

Meanwhile, non-interest income decreased by 5.5% year on year to P27.82 billion in 2021. This, as the 23.2% rise in fee earnings could not offset the decline in trading income.

BPI’s revenues dropped by 4.2% year on year to P97.4 billion in 2021.

On the other hand, the bank’s operating expenses rose by 5.4% to P50.73 billion from a year earlier amid higher technology cost. This brought its cost-to-income ratio to 52.1%.

Total loans rose by 4.9% year on year to P1.48 trillion as of end-2021, backed by growth in mortgage, credit card, and microfinance credit.

BPI’s nonperforming loan (NPL) ratio improved to 2.49% as of end-2021 from 2.68%, while NPL coverage ratio rose to 136.1% from 115.2% a year earlier. The bank’s loan loss provisions dropped by 53.1% to P13.13 billion from P28 billion in 2020.

Meanwhile, the bank’s deposits rose by 13.9% to P1.96 trillion as of end-2021, boosted by the increase in its current account, savings account (CASA) (10.3%) and time deposits (28.2%). BPI’s CASA ratio stood at 77%, while loan-to-deposit ratio was at 52.1%.

BPI’s assets increased by 8.4% year on year to P2.42 trillion, while total equity stood at P293.06 billion as of end-2021.

The bank’s common equity Tier 1 ratio was at 15.8%, while its capital adequacy ratio stood at 16.7%, which are both above minimum regulatory requirements.

Meanwhile, BPI raised P27 billion in fresh funds through its bond offering, where proceeds will be used to fund its corporate needs and refinance its debt.

The papers were oversubscribed by five times versus the initial target issue size of P5 billion, the bank said in a separate filing with the local bourse on Monday.

The papers have a tenor of two years and an interest rate of 2.8068% per annum which will be paid quarterly.

BPI ended the offer period for the bonds a week earlier than the original schedule amid the high demand.

BPI Treasurer Dino R. Gasmen earlier said that proceeds from the issuance will fund the bank’s general corporate needs as well as debt refinancing, while a part will be used to boost BPI’s digitalization.

The issuance is the fourth tranche under BPI’s P100-billion bond program.

The bonds were sold for a minimum investment of P1 million and increments of P100,000 thereafter.

BPI Capital Corp. and The Hongkong and Shanghai Banking Corp. (HSBC) were the joint lead arrangers for the offering. BPI Capital served as the selling agent for the bonds, while HSBC was a participating selling agent.

BPI shares closed at P98.10 apiece on Monday, down by P1.20 or 1.21% from its previous finish. — Luz Wendy T. Noble