MANILA, Philippines - Bank of the Philippine Islands (BPI) has reported a net income of P5.8 billion in the first three months of 2012, more than doubled from the P2.8-billion profit in the same period in 2011.
“BPI’s core income was on track with its projections, and operating results were enhanced by opportunistic securities trading gains,” the universal bank of the Ayala Group said in a statement.
Deposits grew seven percent year-on-year. Loans also sustained its growth, increasing 20 percent as lending to all segments remained vibrant. Its loan-to-deposit ratio stood at 68 percent.
Assets under management (AUM) reached P716 billion, or 15 percent higher than prior year.
BPI president and chief executive officer Aurelio Luis R. Montinola III said that as interest rates showed some volatility in the first few months of the year and the equities market continued its uptrend, the bank sold down some of its securities inventory and realized around P3.7 billion in trading gains.
“As uncertainty in the global economy still prevails, we decided to realize our securities trading gains early in the year,” Montinola said.
Net interest income improved eight percent, or 12 basis points ahead of the previous year. Other income was also better mainly due to higher insurance income and trust fees.
Remittances increased 16 percent while premiums sold by BPI Philam went up 35 percent. Remittances coursed through BPI amounted to $5.5 billion in 2011.
With the extraordinary level of revenues contributed by one-off trading gains, BPI accelerated its contribution to its retirement fund, and compensated for the estimated lower investment yield for the rest of the year.
Operating expenses were thus higher by 17 percent largely on increases in manpower cost, premises, technology, and variable costs.
Impairment losses were also higher due to additional provisions for non-credit related items like actuarial reserves for the pre-need insurance business.
Asset quality improved further as reflected in its net 30-day non-performing loan (NPL) ratio of two percent, down from last year’s 2.4 percent. Reserve cover was 130 percent.
At the end of March, capital stood at P263 billion, while Basel II-adjusted capital adequacy ratio (CAR) was 15.5 percent.
Recently, BPI declared a special cash dividend of P0.50 per share in addition to its regular cash dividend of P0.90 per share for the first half of the year. These are payable on May 12.
Montinola said that while the bank’s first quarter results were excellent, it should not be construed as an indication of the succeeding quarters in view of the one-off securities trading gains.
“We will continue to focus on growing our core income guided by our goals of quality sustainable growth, customer experience innovation and team-oriented employee engagement,” he added.
BPI recorded a net income of P12.8 billion last year, or a 13.4-percent increase over the P11.3 billion in 2010. In 2009, the bank recorded net earnings of P8.5 billion.