MANILA, Philippines — Earnings of Philippine banks grew by 29 percent to P169.46 billion in the first nine months of the year from P131.53 billion in the same period last year on the back of higher interest income and trading gains particularly from foreign exchange transactions.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the banking industry’s total operating income went up by 18 percent to P578.25 billion from January to September compared to P489.94 billion in the same period last year.
The net interest income of banks operating in the country reached P436.77 billion, up 15.9 percent from P376.75 billion. Interest income jumped by 29 percent to P655.08 billion from P507.72 billion, while interest expense surged by 67.8 percent to P218.05 billion from P129.9 billion.
Financial institutions continue to earn more from their expanded loan books that are funded by low-cost deposits as well as earnings from fees and commissions.
On the other hand, the industry’s non-interest income jumped by 25 percent to P141.48 billion from P113.18 billion on the back of higher earnings from fees and commissions as well as trading gains.
Fees and commission income booked a double-digit growth of 10.1 percent to P73.38 billion in the first nine months of the year from P66.63 billion in the same period last year,
Data showed the trading income of Philippine banks surged by 68.7 percent to P54.81 billion from P32.48 billion as realized gains from foreign exchange transactions amounted to P6.23 billion, reversing the P863.62 million losses booked in the same period last year.
On the other hand, foreign exchange profit plunged by 58.1 percent to P3.08 billion from January to September compared to P7.35 billion in the same period last year.
The peso has rallied back to the 50 to $1 level after emerging as the third worst performing currency last year, shedding 5.3 percent to 52.58 to $1 in 2018 from 49.93 to $1 in 2017.
Likewise, realized gains from the sale or redemption of securities amounted to P18.91 billion in the first nine months, reversing the P3.77 billion losses booked in the same period last year.
Profits of universal and commercial banks or big banks jumped by 34 percent to P155.76 billion from P116.07 billion, while earnings of thrift banks or mid-sized banks slipped by 11 percent to P11.02 billion from P12.38 billion.