BPI net income balloons to P5.6 billion

MANILA, Philippines - The Bank of the Philippine islands (BPI) has reported a five-percent growth in net income for the first semester of 2010, to P5.6 billion.

Return on equity reached 16.7 percent while return on assets was placed at 1.6 percent.

Net interest income grew by four percent attributable to a 12-percent increase in average asset base. While foreign exchange income and fees and commissions registered strong growths of 73 percent and 10 percent, overall non-interest income increased minimally on account of lower securities trading gains relative to last year. 

BPI president Aurelio R. Montinola III said that the current business environment was positive from an Asian, Philippine, and Philippine banking perspective.

“We expect significant customer acquisition, continuing prudent lending growth, and deeper cross-sale penetration of our client base. To balance this growth strategy with a buffer for future global market uncertainties, we are raising additional capital via a rights issue at this early stage,” Montinola added.

Operating costs were up by eight percent from last year on variable product related cost as well as premises related expenses. Impairment losses were slightly lower than last year at P1.2 billion. 

BPI’s core businesses remained solid with P771 billion in total resources, up by 7.3 percent. Deposits expanded by 12 percent to P632 billion driven purely by peso deposits. 

Assets under management reached P448 billion, 22 percent higher than a year ago. Together with deposits, total funds managed by the bank recorded a composite growth rate of 16 percent to P1.1 trillion. 

Net loans likewise grew by 13 percent to P352 billion as large corporates, SMEs and consumer loans increased by 13 percent, 14 percent and 16 percent, respectively.  

Last July 28, the bank approved the rights offering of 307,692,307 common shares at a price of P32.50 per share. The rights offering will further strengthen the bank’s Tier 1 capital position to enable the bank to support critical strategic initiatives especially with the expected better economic prospects of the country.