BPI income drops in H1

MANILA, Philippines - Lower securities trading gains as well as the absence of one-off income pulled down the profit of Ayala-led Bank of the Philippine Islands (BPI) by 7.7 percent in the first half.

The country’s third largest bank reported yesterday a net income of P11.7 billion from January to June, about P1 billion lower than the P12.7 billion registered in the same period last year.

The bank’s total revenues amounted to P35.3 billion in the first semester, flat from the P35.2 billion booked in the same period last year.

BPI said net interest income went up 13.6 percent to P23.5 billion from P20.7 billion on the back of wider average net interest margin and a higher loan-to-deposit ratio, while non-interest income fell 18.4 percent to P11.8 billion from P14.5 billion.

The drop in non-interest earnings was attributed to lower securities trading gains as BPI sold a portion of held-to-maturity securities in June last year to fund loan growth, reduce high cost deposits, and enhance capital.

“The absence of one-off trading gains in the first half was partially offset by higher fee-based income, which grew at a robust pace of 17.8 percent year-on-year, driven by cards and payments, service charges, and investment banking,” BPI said.

Excluding the one-off income in June last year, BPI said the bank’s net profit is up 48 percent.

Securities position rose 7.3 percent to P289 billion in the first semester, the bulk or P260.2 billion is held-to-maturity making the bank less exposed to interest rate risk.

Increased spending in technology and to a lesser extend higher regulatory costs pushed up BPI’s operating expenses by 5.4 percent to P18.3 billion in the first half from P17.31 billion in the same period last year.

The bank said it anticipates continued discipline in managing operating expenses for the remainder of 2017.

BPI said its loan book grew 16.9 percent to P1.1 trillion from P904.38 billion amid the 19.5 percent increase in corporate loans while its deposit base climbed 5.3 percent to P1.4 billion from P1.33 billion.

The assets of the Ayala-led bank increased 8.3 percent to P1.7 trillion in the first half from P1.58 trillion in the same period last year.

The bank’s capital base went up 7.9 percent to P173.5 billion, translating to a capital adequacy ratio of 13.7 percent and a common equity tier 1 ratio of 12.8 percent.

Earnings of BPI grew 20.9 percent to P22.05 billion last year from P18.23 billion in 2015 amid the robust performance of its core businesses amid the volatile market conditions.