Q4 performance boosts BPI 2018 profit

Ayala-led Bank of the Philippine Islands grew fourth quarter net profit by 13 percent year-on-year to P6.07 billion, allowing the bank to post a full-year growth in earnings after a flat performance in the first three quarters.

BPI’s full year net income hit P23.08 billion, up by 3 percent from 2017 level on improved margins and expansion in earning assets.

For the fourth quarter alone, BPI’s revenue grew by 20.4 year-on-year. Net interest income rose by 19.4 percent while non-interest income was up 22.6 percent from their comparative levels in 2017.

Total revenue for 2018 rose by 10.6 percent to P78.52 billion, driven by a 16.2-percent growth in net interest income, which reached P55.84 billion.

The increase in net interest income was a result of a 9-percent increase in average asset base, and a 21-basis point expansion in net interest margin. Yield on interest-earning assets rose by 49 basis points, partially offset by a 34-basis point rise in cost of funds, owing to higher documentary stamp taxes, higher time deposit rates and an increase in other borrowings.

Total loans stood at P1.35 trillion, reflecting a 12.7-percent growth year-on-year, boosted by strong growth in corporate loans and credit card loans at 13.3 percent and 23.8 percent, respectively.

Total deposits amounted to P1.59 trillion, up by 1.5 percent, with low-cost deposits growing by 2.4 percent. About 71.9 percent of BPI’s deposit base consisted of low-cost deposits.

For every peso of deposit generated, BPI lent out 85.4 centavos, turning these liabilities into earning assets.

BPI also reported higher fee income from its transaction-based service charges, credit card and rental businesses. However, lower trust and investment management fees, corporate finance fees, and securities trading income tempered the overall non-interest income results, ending at P22.68 billion.

“The capital that we raised in 2018 allowed us to invest in our ongoing digitalization program, and in our high yielding SME (small and medium enterprises), consumer and microfinance businesses,” said BPI president and CEO Cezar Consing. “The returns from these investments will become apparent in the coming years. We’re quite excited by what 2019 offers.”

Operating expenses hit P43.60 billion in 2018, an increase of 13.2 percent year-on-year.—DORIS DUMLAO-ABADILLA