DEVELOPMENT Bank of the Philippines (DBP) recorded a net income of P2.76 billion in the first half, surging by 131% from the P1.19 billion it earned in the same period last year, keeping it on track to meet its profit target.

The state-owned bank attributed the rise to an increase in loan volume and interest income and lower cost of funds as it ramped up its lending activities in support of the National Government’s economic recovery program.

“DBP reaffirmed its commitment to help hasten the economic recovery of the country by intensifying its development lending activities,” DBP President and Chief Executive Officer Emmanuel G. Herbosa said in a statement on Thursday.

“Its solid financial performance in the first half of the year puts it in a prime position to bolster its support to the various priority programs of the National Government,” he added.

DBP Executive Vice-President for Operations Fe Susan Z. Prado also attributed the growth in DBP’s net profit in the first half to a 29% increase in gross margin to P3.09 billion.

This, despite being weighed down by provisions for credit losses totaling P2.8 billion. Net income before provisions stood at P6.41 billion, up by 85% year on year, the bank said.

Ms. Prado said the country’s positive outlook due to the gradual opening of the economy will benefit DBP as the lender looks to capitalize on increased business activities in the second half of the year.

“DBP’s first-half income already represents a 72% realization rate of its P3.85-billion readjusted target for the year and the bank is on track to keep its position as one of the most financially stable government financial institutions in the country,” Ms. Prado said.

The bank’s total loans grew by 13% to P494.15 billion as of June from the P436.02 billion recorded a year ago.

“[About] 55.33% or P273.43 billion were released to bankroll projects in the infrastructure and logistics sector, majority of which are located in the National Capital Region, Central Visayas, and Central Luzon,” Mr. Herbosa said.    

The bank provides credit support to four strategic sectors of the economy — infrastructure and logistics; micro, small and medium enterprises (MSMEs); the environment; and social services and community development.

DBP’s outstanding loans for social infrastructure and community development projects amounted to P98.49 billion as of June.

Outstanding credit for other developmental initiatives covering finance and insurance, manufacturing, wholesale and retail trade, accommodation, and food services totaled P65.20 billion in the same period.

“The bank also provided P48.69 billion in loans for the agriculture sector in support of the government’s food sufficiency program, as well as P52 billion for environment-related projects and P31.58 billion for MSME sector,” Mr. Herbosa said.

Meanwhile, the lender’s deposits reached P731.90 billion, representing 82% of its P895-billion target for the year, with low-cost deposits rising by P9 billion.

DBP is the sixth-largest lender in the country in terms of assets with P1.06 trillion at end-March, data from the central bank showed. — KBT