BPI 9-month profit soars to P38.6 billion after strong Q3

MANILA, Philippines — Earnings of Bank of the Philippine Islands (BPI) grew by a little over 26 percent to P38.6 billion from January to September versus last year’s P30.5 billion after a strong performance in the third quarter.

BPI chief finance officer Eric Luchangco said the bank’s historical high nine-month net income was driven by sustained loan and margin growth, as well as tempered provision.

“Sustained loan and margin growth, as well as tempered provisions, were the main drivers of the strong financial performance,” Luchangco said in a disclosure to the Philippine Stock Exchange.

For the third quarter alone, BPI’s profit surged by 33.3 percent to a record P13.5 billion from P10.1 billion in the same quarter last year on the back of higher net interest income and non-interest income.

According to Luchangco, the 172-year-old bank’s earnings in the third quarter was its highest quarterly net income in the past decade.

During the nine-month period, he said total revenues went up by 15.3 percent to P100.9 billion from a year-ago level of P87.5 billion, fueled by the 24.5 percent jump in net interest income to P76.8 billion from P61.6 billion on the back of wider interest margin and higher asset base.

The Ayala-led bank reported a 6.6 percent decline in non-interest income to P24.1 billion from January to September this year due to the property sale gain recognized last year.

Removing the impact of this one-off transaction, Luchangco said non-interest income of the 172-year old bank would have increased by 15.7 percent or P3.3 billion on higher fees from credit cards, bancassurance, various service charges, and trading gains.

The listed bank’s operating expenses jumped by 21.3 percent to P48.6 billion from P40.1 billion due to larger spending for manpower, technology, and marketing.

The provisions for potential loan losses fell by 60 percent to P30 billion during the nine-month period from last year’s P7.5 billion despite the slight increase in non-performing loan ratio to 1.97 percent from 1.94 percent.

Luchangco reported an 8.8 percent increase in the bank’s loan book to P1.7 trillion in end September this year from P1.6 trillion in end September last year, driven by the 37.7 percent jump in credit card receivables, 22.3 percent surge in auto loans, and a 5.3 percent increase in corporate loans.

He added that deposit base climbed by 6.7 percent to P2.2 trillion from P2 trillion.

BPI’s asset base expanded by 7.2 percent to P2.7 trillion, while equity increased by 11.5 percent to P349.6 billion.

This translated to a common equity tier 1 ratio of 16.1 percent and a capital adequacy ratio of 17 percent, both well above the threshold imposed by the Bangko Sentral ng Pilipinas.

During the nine-month period, the bank’s return on equity increased to 15.6 percent from 13.73 percent, while return on assets likewise grew to 1.95 percent from 1.66 percent.

BPI is awaiting the necessary regulatory approvals for its planned merger with Gokongwei-owned Robinsons Bank Corp.