BPI earns 8% more at P13.8 B in January-September

MANILA, Philippines - Earnings of Ayala-led Bank of the Philippine Islands (BPI) grew 8.1 percent in the first nine months despite the slowdown recorded in the third quarter due to higher expenses, income taxes, and impairment losses.

The oldest bank in the Philippines and Southeast Asia reported a net income of P13.84 billion from January to September, P1 billion higher compared to P12.8 billion last year

Total revenues of BPI went up 9.1 percent to P44.1 billion as interest income jumped 14.6 percent to P28.7 billion in the first nine months with interest earnings from loans and advances growing 15.9 percent and profits from deposits with the Bangko Sentral ng Pilipinas and other banks increasing by 20.9 percent.

BPI’s total loans grew 11.2 percent to P780.1 billion while deposits jumped 13.3 percent to P1.18 trillion.

The bank’s interest expense surged 24.1 percent to P10 billion largely due to 25 percent jump in interest expense on deposits.

BPI’s non-interest income rose 4.6 percent to P15.4 billion in the first nine months after it booked a P1.2 billion trading gain on securities as it took profits on winning positions as well as the 35.2 percent growth in gross premiums by its non-life insurance unit.

The increase was enough to wipe out the 30 percent plunge in earnings from its foreign exchange trading activities due to losses on proprietary positions.

BPI also reported its impairment losses went up 23.8 percent to P1.1 billion in the first nine months due to higher loan loss provisioning.

The bank’s other expenses grew by 6.7 percent to P22.9 billion in the first nine months of the year amid higher regulatory costs, management and professional fees, litigation expenses, compensation and fringe benefits, as well as occupancy, and equipment related expenses.

Furthermore, the bank’s provision for income tax rose by 10.4 percent to P3.9 billion due to higher income subject to regular corporate income and final tax as well as higher loss provision set-up and lower write-offs.

For the third quarter alone, BPI reported a 5.8 percent decline in net income to P4.5 billion from P4.76 billion in the same period last year.