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BPI posts higher net income in 2018

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BANK OF THE Philippine Islands (BPI) posted a higher net income in 2018 on the back of strong revenues.

In a disclosure to the local bourse on Wednesday, the Ayala-led bank said it posted a full-year income of P23.08 billion in 2018, up 3% from the P22.42 billion it booked in 2017.

For the fourth quarter alone, BPI’s net income grew 13% to P6.07 billion from the P5.37-billion income tallied in the same period in 2017.

BPI’s total revenues reached P78.52 billion in 2018, up 10.6% from the prior year, driven by the 16.2% growth in its net interest income, which reached P55.84 billion.

The bank attributed the growth in its net interest income to the 9% increase in average asset base as well as the 21-basis-point increase in its net interest margin.

Total loans stood at P1.35 trillion in 2018, 12.7% higher from P1.2 trillion tallied in the comparative year-ago period, driven by the growth in its corporate and credit card loans which stood at 13.3% and 23.8%, respectively.




BPI’s non-performing loan ratio was at 1.85% as of end-2018.

Deposits, on the other hand, stood at P1.59 trillion in 2018, up 1.5% from P1.56 trillion a year ago. Current and savings accounts (CASA) grew 2.4% year-on-year, with a CASA ratio of 71.9%. Its loan-to-deposit ratio was at 85.4%.

BPI also booked higher fee-based income from its transaction-based service charges, credit card and rental businesses. However, this growth was tempered by lower trust and investment management fees, corporate finance fees, as well as securities trading income.

The lender also logged higher operating expenses at P43.6 billion in 2018, up 13.2% due to higher manpower, premises, technology and other operating costs.

Meanwhile, the bank set aside P4.92 billion in provisions for losses in 2018, 29.7% higher than the year-ago level.

“The capital that we raised in 2018 allowed us to invest in our ongoing digitalization program, and in our high yielding SME (small and medium enterprises), consumer and microfinance businesses,” BPI President and Chief Executive Officer Cezar P. Consing was quoted as saying in the statement.

In December, the bank raised P25 billion via peso-denominated peso bonds, carrying a tenor of 1.25 years and an interest rate of 6.797% per annum.

It also completed a P50-billion rights offer in May, with the proceeds funding its business operations and expansion.

The bank likewise raised $600 million in August through a drawdown from its $2-billion medium-term note program, which it said was the largest issuance by a local lender in the offshore debt market.

“The returns from these investments will become apparent in the coming years. We’re quite excited by what 2019 offers,” Mr. Consing added.

BPI is one of five domestic banks — with the others being Land Bank of the Philippines, BDO Unibank, Inc., Rizal Commercial Banking Corp. and Metropolitan Bank & Trust Co. — that have exposure to the troubled Hanjin Heavy Industries and Construction Philippines at $52 million.

In Jan. 8, the South Korean shipbuilder filed for corporate rehabilitation before an Olongapo court, leaving some $412 million in outstanding loans from the five banks.

BPI shares stood at P89.75 apiece on Wednesday, up 20 centavos or 0.22% from the previous close. — Karl Angelo N. Vidal