The country’s banks grew profits by more than 50 percent in the first semester of 2013 over the same period last year amid the continued growth of their loan portfolios and the expansion of their physical reach.
Lower returns from banks’ traditional lending businesses due to low interest rates were offset by higher non-interest revenues, which came from fee-based services and other financial products.
Documents released by the Bangko Sentral ng Pilipinas (BSP) showed the banking system’s total profit reached P98.8 billion in the first six months of 2013, up 59.6 percent from P61.9 billion the year before.
The industry’s return on equity also improved to 15.46 percent from 12.71 percent in the same period.
Bulk of these profits were from universal and commercial banks, whose consolidated income reached P88.99 billion at the end of June 2013, higher than the P55.15 billion booked the year before.
Profits of thrift banks reached P7.68 billion in June from P4.63 billion last year. Rural and cooperative banks booked a total net income of P2.13 billion, the same as last year’s figure.
While majority of the industry’s profits were from traditional lending operations, the growth was traced to non-interest income, which came from intermediation services, trading gains and income from fiduciary services, among others.
The industry’s interest income reached P179.07 billion, slightly higher than the P178.88 billion booked from January to June of 2012.
Non-interest income, meanwhile, shot up to P118.3 billion at the end of the first semester from P74.29 billion last year, representing a year-on-year growth of 59.2 percent.
Lending by universal and commercial banks, which represented about 90 percent of the industry’s total portfolio, grew by 12.3 percent in June of this year, documents from the BSP showed.
“The expansion of domestic economic activity and stable financial conditions supported the sustained growth in bank lending in June,” the BSP said in a previous statement.
Local banks also continued to expand their reach, with their total offices increasing to 9,543 at the end of June, up from 9,207 offices at the end of June 2012.