BPI boosts lending, deposits in 9 months

MANILA, Philippines - Despite a 19-percent decline in net earnings in the first nine months of 2014, the Bank of the Philippine Islands (BPI) had still recorded double-digit growth in both its lending and deposit-taking activities in the same period.

In a report, BPI president and chief executive officer Cezar P. Consing said net income amounted to P12.8 billion, a 19-percent decline from the first nine months of 2013, which included extraordinary gains from securities trading.

It however reported return on equity (ROE) of 13.4 percent and return on assets (ROA) of 1.4 percent.

“We are very pleased with how our client businesses across retail, corporates, and financials have stepped up to fill in for proprietary trading. We are excited about our investments in technology and customer channels, and the enhancements they will bring to the experience of BPI’s customers,” Consing added.

Compared to the previous quarter, the universal bank of the Ayala Group reported a 28-percent increase in net earnings of P4.77 billion in the first nine months of 2014, compared to the P3.74 billion in the same period last year.

On a year-to-date basis, net interest income grew 15 percent as a result of the bank’s strong loan growth and improving deposit mix.

Net loans reached P702 billion, an increase of 28 percent over year-ago levels.

Deposits ended the quarter at a little over P1 trillion, an increase of 17 percent over year-ago levels. Furthermore, the bank’s CASA ratio as of 2014 Q3, 76.5 percent, improved as compared to 68.9 percent one year ago and 72.7 percent in the prior quarter.

Non-interest income amounted to P14.8 billion for the year, representing a 17-percent decline compared to year-ago levels.

Income in relation to securities and foreign exchange trading was P2.1 billion, a significant reduction relative to P5.8 billion one year ago.

Non-interest income excluding securities and foreign exchange trading was P12.7 billion, a seven-percent increase from the prior year.

Operating expenses grew by 13 percent, attributable to the bank’s investment in technology and its headcount expansion. We remain very disciplined about costs.

In the third quarter this year, BPI’s manpower complement was 14,336 as compared to 12,750 at the end 2014 Q3, a 12-percent increase. Cost-to-income ratio as of 2014 Q3 was 53 percent.

“Our headcount will level off at 14,500, a long held target,” the BPI chief executive said.

The bank maintained strong asset quality and capitalization ratios.

Gross 90-day non-performing loans (NPLs) stood at 1.8 percent, an improvement as compared to 2.1 percent one year ago. Reserve cover was 107 percent.

Equity capital stood at P138 billion end September, resulting in a Basel III capital adequacy ratio (CAR) of 15.7 percent and CET 1 ratio of 14.9 percent.