BANK OF THE Philippine Islands (BPI) booked a lower net income in the second quarter as it continued to boost loan provisions amid the coronavirus crisis.

The Ayala-led lender’s net earnings declined 24.6% year on year to P5.29 billion in the second quarter from the P7.01 billion logged in the same period in 2019, it said in a filing on Thursday.

This brought the bank’s bottom line for the first semester to P11.68 billion, down by 15% from the P13.74 billion seen a year ago.

“BPI booked P15.01 billion in provisions for loan losses in the first semester of 2020 as the COVID-19 (coronavirus disease 2019) pandemic ushers in a difficult period for consumers and businesses that could lead to potentially higher NPLs (nonperforming loans),” it said, noting the amount is 4.3 times higher compared to the P3.48 billion it set aside in the first half of 2019.

Meanwhile, revenues climbed 14.8% in the first six months of the year to P52.69 billion.

Net interest income also grew 12.5% to P36.4 billion. This, on the back of the 5.9% growth in its average asset base as its net interest margin rose by 18 basis points to 3.55%.

Non-interest income rose 20.3% to P16.29 billion, supported by higher securities trading gains.

The bank’s operating expenses dipped 0.3% to P24.19 billion due to lower expenses on premises, technology, marketing, and products. Cost-to-income ratio stood at 45.9%, down from the 52.9% seen a year ago.

Its loan portfolio inched up 5.9% year on year to P1.43 trillion, boosted by growth in microfinance (41.4%), corporate (8.4%), and consumer (2.5%) segments.

NPL ratio was at 1.83% as of June. NPL coverage ratio increased to 140.7% from the 97.5% recorded a year ago.

Total deposits likewise rose 6.3% to P1.76 trillion, bolstered by the 11.8% growth in current account, savings account or CASA deposits. The lender’s CASA ratio and loan-to-deposit ratio stood at 71.8% and 81.4%, respectively.

Meanwhile, the bank’s assets increased 5.8% to P2.26 trillion. Total equity stood at P278.81 billion. Return on equity and on assets were at 8.56% and 1.08%, respectively.

BPI’s common equity Tier 1 ratio was at 15.63% while capital adequacy ratio was at 16.52%, both beyond the required regulatory levels.

The bank’s shares closed at P70.85 apiece on Thursday, up by 85 centavos or by 1.21% from the previous finish. — L.W.T. Noble