A view of a bank building in Manila, July 1, 2014. — REUTERS/ROMEO RANOCO

BANK of the Philippine Islands (BPI) saw its net income rise by 52% year on year to P12.1 billion in the first quarter amid improved net interest earnings and as it set aside lower loan loss provisions.

“The solid performance was attributable to average asset base expansion, margin growth, and lower provisions,” BPI said in a disclosure to the local bourse on Thursday.

Its first-quarter net profit translated to a return on equity of 15.4% and a return on assets of 1.88%.

BPI’s financial statement was unavailable as of press time.

The bank’s revenues rose by 25.1% year on year to P31.7 billion last quarter.

BPI said this came on the back of a 27.2% increase in its net interest income to P24.2 billion as its average asset base grew by 10% and its net interest margin rose by 52 basis points to 3.94%.

“Further boosting revenues was the 18.6% jump in non-interest income to P7.6 billion, driven by higher credit card billings and charges, securities trading gains, and fees from investment banking project finance deals,” the lender said.

Meanwhile, operating expenses increased by 19.7% to P15.1 billion as it spent on “manpower structural increases, milestone payments for digitalization initiatives, targeted marketing campaigns and rewards redemptions, and higher transaction-related processing fees.”

BPI’s cost-to-income ratio stood at 47.5% in the quarter.

The bank’s loan portfolio grew by 13.6% to P1.7 trillion amid a 12.6% increase in corporate loans, a 38.7% rise in credit card loans and a 16.4% expansion in auto loans.

Despite the increase in loans, BPI said it saw “continued strength in asset quality,” with its nonperforming loan (NPL) ratio improving to 1.82% as of March from 2.38% a year prior.

Meanwhile, its NPL coverage ratio stood at 176.71%.

Loan loss provisions declined by 60% to P1 billion from the P2.5 billion recorded a year prior “as asset quality has been on an improving trend.”

On the funding side, deposits with the bank rose by 13.6% year on year to P2.1 trillion, with its current and savings account or CASA ratio at 70.3%.

BPI’s loan-to-deposit ratio stood at 77.3%.

Total equity was at P331.6 billion at end-March, with the bank posting a common equity Tier 1 ratio of 15.7% and a capital adequacy ratio of 16.6%, both above regulatory requirements.

Assets rose by 12.4% to P2.7 trillion as of March.

BPI’s shares climbed by P2.60 or 2.59% to close at P102.80 each on Thursday. — A.M.C. Sy