Banks’ net income rises in 1st half
THE PHILIPPINE BANKING industry recorded a higher net profit in the first half of the year on the back of higher net interest income and growth in their loan portfolios, central bank data showed.
Meanwhile, soured loans held by Philippine banks slipped in June, ending five straight months of increases. This brought the nonperforming loan (NPL) ratio to its lowest in two months.
The cumulative net income of the banking system grew by 24.7% to P178.51 billion in the first half from P143.12 billion in the same period in 2022, based on preliminary data from the Bangko Sentral ng Pilipinas (BSP).
Net interest income stood at P414.45 billion in the January-to-June period, up by 16.9% year on year from P354.32 billion.
Total operating income of Philippine banks climbed by 56.1% to P736.16 billion as of June, from P471.32 billion in the prior year.
Broken down, interest earnings surged by 40.9% to P577.23 billion. However, expenses nearly tripled (195%) to P162.6 billion as of June from P54.97 billion a year ago.
Meanwhile, non-interest income declined by 7.7% to P107.94 billion as of June from P117.01 billion in the same period in 2022.
Dividend and trading income in the period dropped by 8.4% and 3.2% to P1.14 billion and P10.01 billion from a year ago, respectively.
On the other hand, earnings from fees and commissions increased by 9.9% to P76.13 billion
Lenders’ non-interest expenses rose by 7.9% year on year to P288.07 billion from P266.95 billion.
The industry’s losses on financial assets dropped by 13.9% to P32.35 billion as of end-June from P37.59 billion a year prior.
Provisions for credit losses declined by 18.9% to P37 billion from P45.65 billion, and bad debts written off fell by 84.5% to P280.28 million from P1.8 billion.
Banks’ total loan portfolio grew by 6.7% to P12.49 trillion as of end-June from P11.72 trillion a year earlier.
Meanwhile, deposit liabilities stood at P17.48 trillion in the first half, rising by 6% year on year from P16.49 trillion.
The industry’s assets rose by 6.9% to P22.83 trillion as of June from P21.35 trillion a year ago.
JUNE NPL SLIPS
Meanwhile, separate central bank data showed the gross NPL ratio of the Philippine banking industry slid to 3.42% in June, from 3.46% in May and 3.6% a year ago. It was the lowest since 3.41% in April.
Bad loans inched down by 3.2% to P435.01 billion in June from P421.31 billion a year earlier. This was also 0.25% lower than the P436.12 billion in May.
Loans are considered nonperforming once they remain unpaid for at least 90 days after the due date. They are deemed as risk assets because borrowers are unlikely to settle these loans.
Past due loans rose by 5.5% to P518.23 billion from P490.83 billion a year ago. This brought the ratio to 4.08% from 4.19% a year ago.
Restructured loans decreased by 7.7% to P312.81 billion from P338.94 billion in the same month in 2022. These accounted for 2.46% of banks’ loan book.
Banks ramped up their loan loss reserves to P443.33 billion in June from P409 billion a year ago.
The industry’s NPL coverage ratio improved to 101.91% from 97.08% the year prior. — Keisha B. Ta-asan
