BPI Q3 net profit up 12%

Ayala-led Bank of the Philippine Islands grew its third quarter net profit by 12 percent year-on-year on improved margins, allowing the bank to offset the earnings contraction seen in the first semester.

This brought the January to September profit to P17.01 billion, flat from the previous year but an improvement from the first half, when profit went down by 5.7 percent year-on-year to P11.03 billion.

Total revenue in the first nine months rose by 7.3 percent to P56.89 billion, driven by a 15.1-percent growth in net interest income to P40.88 billion. The rise in interest income was a result of a 9.4-percent increase in average asset base, and a 17-basis point expansion in net interest margin (NIM).

Interest income from loans grew by 24.2 percent year-on-year as the yield on interest-earning assets rose by 37 basis points. This was partially offset by a 24-basis point increase in cost of funds due to higher time deposit rates and higher documentary stamp taxes on deposits.

On a quarter-on-quarter basis, NIM expanded by 14 basis points. This was traced to favorable loan repricing following the Bangko Sentral ng Pilipinas’ policy interest rate hike earlier in the quarter.

The bank’s NIM steadily increased to 3.24 percent in the third quarter, from 3.1 percent in the second quarter, and from 2.91 percent in the first quarter.

BPI grew its loan book by 12.9 percent year-on-year to P1.27 trillion, boosted by the strong growth in corporate loans and credit card loans at 13.7 percent and 22 percent, respectively.

Total deposits hit P1.54 trillion, up by 2.5 percent, with low-cost deposits growing by 6.4 percent. Low-cost deposits accounted for some 74 percent of the bank’s total deposits.

For every P1 of deposits generated by the bank, it converted 82.2 centavos into earning assets by lending.