BPI faces P135 million fine from SEC

MANILA, Philippines — Bank of the Philippine Islands (BPI) is facing a P135-million fine from the Securities and Exchange Commission (SEC) for failing to secure regulatory confirmation for its stock purchase and option plan conducted almost a decade ago.

In a disclosure to the Philippine Stock Exchange (PSE), the Ayala-led bank said it was assessed a fine of P134.62 million for violating a provision of the Securities Regulation Code (SRC).

“In its letter dated Feb. 3, 2023, the SEC assessed penalties against the company for violation of Section 8.1 of the SRC in the amount of P134.62 million, for omitting to secure SEC’s confirmation of exemption from registration for its seven-year Executive Stock Purchase Plan and Executive Stock Option Plan launched in 2013,” the bank said.

BPI earlier reported a 66-percent jump in its 2022 earnings to a record high of P39.6 billion from P23.88 billion a year earlier, driven by strong loan growth, higher net interest margin, and lower provision for potential loan losses.

The Ayala-led bank also said the windfall from a property sale in Makati in the second quarter of last year boosted its bottomline.

Excluding the impact of the one-off gain from the property sale, BPI’s net income still jumped by 50.2 percent to P35.9 billion.

BPI’s total revenues hit a record high P118.5 billion in 2022, up 22 percent from P97.4 billion in 2021.

This was boosted by the 22-percent jump in net interest income to P85.1 billion from P69.58 billion, on the back of asset base expansion and improvement in net interest margin by 28 basis points to 3.59 percent.

Likewise, non-interest income grew by 20.3 percent to P33.5 billion from P27.82 billion, primarily from the one-off gain on the property sale, higher fees from the credit cards business and transaction banking services, as well as gains from foreign exchange transactions.

Total operating expenses went up by 14.3 percent to P58 billion from P50.73 billion, with all categories showing increases, led by technology and marketing.

Provision for bad debts fell by 30.2 percent to P9.2 billion from P13.13 billion as asset quality continued to improve with the NPL ratio declining to 1.76 percent from 2.49 percent, while the NPL coverage ratio rose to 180.1 percent from 136.1 percent.

BPI’s loan book grew by 15.3 percent to P1.7 trillion from P1.48 trillion, led by growth in the credit card, corporate or small medium enterprises and auto portfolios of 31.1 percent, 15.5 percent, and 14 percent, respectively.

Total deposits expanded by 7.2 percent to P2.1 trillion from P1.96 trillion.

For the fourth quarter alone, the earnings of BPI surged by 41.4 percent to P9.1 billion from P6.4 billion in the same quarter in 2021 on higher revenue growth and also lower provisions recognized.

For 2022, the total assets of BPI inched up by 7.5 percent to P2.6 trillion. Total equity stood at P317.7 billion, with a common equity tier 1 ratio of 15.1 percent and a capital adequacy ratio of 16 percent, both well above regulatory requirements.