BANK of the Philippine Islands (BPI) saw an increase in its net income in the third quarter, driven by the growth in its interest-bearing businesses.
In a statement released to the local bourse on Wednesday, the Ayala-led BPI said it booked a net income of P5.36 billion in the three months ended September, 14% higher than the P4.71 billion recorded in the comparable year-ago period.
The higher net income booked in the third quarter drove the bank’s nine-month net profit to climb 32.7% to P17.05 billion, excluding one-off gains from the sale of securities in June last year. Comprehensive income, meanwhile, dropped 7.5% to P17.27 billion.
Broken down, the growth in BPI’s earnings for the first nine months was mainly driven by its net interest income — which includes gains from loans, and trading and investment securities, among others — which grew by 13.5% to P35.5 billion. This was due to wider average net interest margin and a higher loan-to-deposit ratio.
Total loans reached P1.12 trillion, up 20.5% year-on-year. The increase was largely driven by corporate loans which grew by 24.3%. Gross 90-day non-performing loans (NPL) declined to 1.47% from 1.64%, while its NPL reserve cover rose from 112.3% to 125.6%. Total deposits also rose 14% year-on-year to P1.5 trillion. The bank’s current account, savings account ratio was at 71.3%, while its loan-to-deposit ratio was at 74.6%.
Meanwhile, its non-interest income declined 8.4% to P17.54 billion, offsetting interest gains. The absence of significant one-off trading gains similar to those realized in June 2016 was to blame for the lower earnings.
Meanwhile, BPI’s fee-based income rose 20.1% year-on-year, mainly driven by investment banking, asset management and trust, deposit-related fees, and credit cards.
On the other hand, BPI’s expenses for the first nine months of the year totalled P27.86 billion, 8.9% higher than costs recorded the same period last year, due to increased spending in technology, as well as higher regulatory costs.
The bank’s total assets climbed 13.2% to P1.8 trillion, while total capital stood at P181.88 billion, up 8.2% year-on-year.
BPI’s capital adequacy ratio was at 12.7%, while common equity Tier 1 ratio was at 12.47%, both higher than end-2016 levels and also the regulatory minimum.
BPI’s cost-to-income ratio was 52.5%, higher compared to 50.7% for the same period last year. Return on equity was 13.1% and return on assets was 1.3%, lower by 1.6 and 0.2 percentage points, respectively.
In a statement, BPI President and Chief Executive Officer Cezar P. Consing said the third-quarter and nine-month results showed “a good balance of growth and profitability.”
“Earnings from lending operations and fee-based businesses are good, and the investments we have been making in technology and digitization should allow for even stronger operating and financial results going forward,” Mr. Consing said.
BPI shares closed at P99.60 apiece yesterday, gaining P1.60 or 1.63%. — K.A.N. Vidal