BANK OF THE Philippine Islands (BPI) reported higher net earnings in the second quarter on the back of strong interest and non-interest income growth.

In a regulatory filing Thursday, the Ayala-led lender said it posted a P7.01-billion net income in the April-June period, surging by 46.8% from the comparable year-ago period.

This brought BPI’s bottom line for the first semester to P13.74 billion, up 24.6% from the P11.03 billion booked in the same period last year.

The bank’s total revenues for the first half climbed 23.3% to P45.9 billion, brought by the 24.1% year-on-year growth in net interest income, which reached P32.36 billion.

Total loans reached P1.35 trillion as of end-June, 10.8% higher from P1.22 trillion logged last year. This was boosted by corporate and consumer loans, which grew 11.6% and 10.3%, respectively.

BPI noted that within the consumer segment, credit card loans continued to grow 25.8% in the first half.

Non-performing loans ratio stood at 1.86%, flat from end-2018 level.

On the funding side, total deposits climbed eight percent to reach P1.66 trillion in the first semester. Its current and savings account ratio stood at 68.3%, while loan-to-deposit ratio was at 81.7%.

Meanwhile, non-interest income reached P13.54 billion in the first half, up 21.5% from the comparative year-ago period, on the back of increases in securities trading gains and fee-based income.

BPI’s securities position was at P404.22 billion, up by 33.4% from last year’s level. Fees, commissions and other income climbed 16.1%, brought by credit cards, deposit products, insurance, transaction banking, leasing, retail loans and electronic channels.

Operating expenses stood at P24.28 billion in the January-June period, up 14.4% year-on-year due to the bank’s continued investments in technology, rollout of new microfinance branches, and one-time manpower expenses related to collective bargaining agreements.

The lender’s cost-to-income ratio stood at 52.9% for the first half, coming from 57% in the same period last year.

Provision for loan losses was at P3.48 billion, including specific reserves for its exposure to Hanjin Heavy Industries and Construction (HHIC) Philippines.

This brought BPI’s loss coverage ratio to 100.7%.

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

“Total equity reached P259.88 billion, providing a strong capital position to deliver future growth,” BPI said.

The bank’s common equity Tier 1 ratio stood at 15.55%, while capital adequacy ratio was at 16.44%. Overall, assets grew 12.3% to P2.13 trillion from the P1.9 trillion booked as of June 2018. Return on assets was at 1.34%.

BPI shares closed at P91.50 apiece on Thursday, up P1.50 or 1.67%. — Karl Angelo N. Vidal

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