BPI posts 27% income hike to P2.5B in Q1

The Bank of the Philippine Islands (BPI) recorded a P2.5-billlion net income in the first quarter of 2006, 27 percent higher than the P2-billion earnings in the same period last year.

"The improvement in the bottom line was mainly driven by a nine-percent rise in total revenues while operating costs were kept at manageble levels," the bank said in a statement.

Operating expense grew by four percent due to additional expenses from the newly-acquired Prudential Bank operations. These pushed manpower and premise costs higher by 17 percent and 21 percent, respectively.

Other operating expenses were, however, down 19 percent on last year’s non-recurring settlement of prior period taxes. Cost to income ratio was at 52 percent.

Return on equity (ROE) rose to 18 percent from 15 percent, and return on assets (ROA) rose to two percent from 1.8 percent.

The increase in total revenues was driven by the 22-percent expansion in non-interest income from trading gains.

Service charges and commissions as well as the insurance subsidiaries operating income likewise posted gains of 10 percent and 13 percent, respectively. The bank’s asset management and trust group and rental income business also recorded strong performance.

Net interest income increasd two percent as spreads narrowed by 33 basis points.

BPI’s net income for the full year 2005 after adjustments to the new international accounting standards (IAS) hit a record P8.4 billion. Net earnings in 2004 was at P6.7 billion.

For the 2005 performance, ROE improved to 14 percent from 12.5 percent and ROA from 1.6 percent to 1.8 percent.

Total revenues amounted to P28.1 billion, higher by P5.4 billion or 24 percent as both net interest income and non-interest income posted strong growth of 22 percent and 28 percent, respectively.

Operating expenses grew by P3.3 billion on higher documentary stamp taxes (DST) and non-recurring tax settlements. It also booked P2 billion in impairment losses, P377 million or 23 percent more than the P1.6-billion loss provision of the previous year.