THE banking system’s overall net profit dropped to P126.782 billion in the first nine months, reflecting the impact of the coronavirus pandemic on lenders’ profitability as they ramped up provisions for credit losses.

The nine-month figure is lower by 3.61% compared to the P131.534 billion seen in the same period of 2019.

Bank earnings were dragged by provisions for credit losses which reached P143.79 billion in the period, surging 292% from the P36.65 billion they set aside a year ago.

Meanwhile, soured debts written off slipped 0.7% to P2.796 billion from P2.814 billion.

Non-performing loans (NPLs) totalled P364.672 billion as of end-September, a 60% climb from P227.604 billion a year ago and up 20% from P304.997 billion as of end-August.

With this, the gross NPL ratio reached 3.4%, up from the 2.15% in September and the highest since the 3.42% NPL ratio recorded in May 2013.

In the first nine months, banks’ net interest income rose 10.7% to P490.8 billion.

Non-interest income also climbed 18% to P169.9 billion, backed by trading income, which jumped 70% to P93.56 billion.

Meanwhile, earnings from commissions and fees dropped 12% to P65.25 billion.

The BSP said the banking industry continues to be resilient and is armed with ample buffers to survive the crisis. — LWTN