BPI continues to bank on upbeat local growth

CEBU, Philippines - Although anticipating inevitable challenges from the recent cut made by the Bangko Sentral ng Pilipinas (BSP) on overnight borrowing rates, the Bank of the Philippine Island (BPI) continues to seize opportunities from the ongoing domestic economic growth.

“At this point in time, notwithstanding the impact of the Eurozone slowdown, we are on track with our target of delivering sustainable 15 percent return on equity,” said BPI vice president and chief operating officer Gil A. Buenaventura.

“We are happy to see that loan growth has remained resilient though slightly below the first quarter performance,” he said.

The Ayala-led BPI, reported a net income of P9.4 billion for the first half of the year, 52 percent higher than the P6.2 billion realized in the same period last year. This translated to a 21 percent Return on Equity and a 2.3 percent Return on Assets.

In its official first half of 2012 operating results, the bank reported that net income for the period was P3.6 billion, eight percent higher than a year ago due to the 9.4 percent increase in net interest income but tempered by the higher tax line.

Both non-interest income and operating expenses were relatively flat against the same quarter last year.

For the first semester, the significant growth in profits was mainly driven by the 24 percent improvement in revenues. Net interest income rose by nine percent while non-interest income surged by 51 percent.

Improvement in net interest income was due to the combined effect of a P32 billion increase in average asset base and a 14 bps improvement in net spreads.

Non-interest income on the other hand, was boosted by the extraordinary level of trading gains realized in the first quarter of the year as the bank sold down its securities inventory.

Loan growth from all segments was sustained as net loan portfolio reached P480 billion, 17 percent higher than a year ago.

Both middle market and Small and Medium Enterprises (SMEs) segments contributed a 19 percent growth while the top corporate segment went up by 15 percent. While, consumer lending increased by 17 percent. 

Despite the double-digit growth in portfolio, asset quality continued to improve with net 30-day NPL (Non-performing loan) ratio at 1.4 percent from last year’s 1.8 percent. Reserve cover was 140.8 percent.

Total intermediated funds amounted to P1.46 trillion as the Bank’s total deposits stood at P734 billion with growth coming largely from low cost deposits. Assets under management was P730 billion, a 15 percent growth from last year.

BPI’s market capitalization was P265 billion at end of June and remains the largest among domestic banks. Its Basel 2 Capital Adequacy Ratio (CAR) was 14.5 percent. (FREEMAN)

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