BPI profit up 29.5% as of Sept

Ayala-led Bank of the Philippine Islands (BPI) grew its net profit at end-September by 29.5 percent year-on-year to P22.03 billion on strong earnings from its lending, treasury and fee-based businesses.

For the third quarter alone, the net profit of Southeast Asia’s oldest bank rose by 38.6 percent year-on-year to P8.29 billion, the bank disclosed to the Philippine Stock Exchange on Wednesday.

As the third quarter results were better than expected, BPI shares gained by 1.06 percent to close at P95 per share on Thursday. It was the day’s second-most actively traded company.

Total revenue for the nine-month period increased by 24.8 percent to P71 billion, driven by a 19.8-percent year-on-year growth in net interest income, which reached P48.66 billion.

Noninterest income reached P22.34 billion during the nine-month period, up by 37.5 percent year-on-year, due to higher securities trading gains and fee-based income.

Net interest margin widened by 26 basis points on higher asset yields, which rose by 89 basis points but partially offset by higher cost of funds.

The bank also grew its loan book by 8.2 percent year-on-year to reach P1.37 trillion at end-September, driven by the consumer and corporate loan segments, which rose by 12.5 percent and 7.4 percent, respectively. Within the consumer segment, credit card loan grew by 24.6 percent year-on-year.

On the other hand, noninterest income reached P22.34 billion in the nine-month period, marking a 37.5-percent increase year-on-year, driven by higher securities trading gains and fee-based income.

The bank’s total securities position stood at P392.99 billion, up by 17.3 percent year-on-year. Fees, commissions and other income increased by 19.1 percent year-on-year, primarily from higher fee revenues from credit cards, transaction banking, electronic channels, deposit products and insurance.

On the funding side, total deposits reached P1.62 trillion, higher by 5 percent year-on-year. Of the total, 69.1 percent were low-cost deposits.

For every peso of deposit liabilities generated by the bank for the period, it converted 84.7 centavos into earning assets by lending them out.

Operating expenses stood at P37.09 billion, higher by 15.6 percent year-on-year. The bank spent 52.2 centavos for every peso earned, lower than 56.4 centavos in the same period last year.

Provision for losses for the nine-month period—including for bankrupt shipping firm Hanjin—stood at P4.58 billion. For every peso of bad loan, the bank has set aside a buffer of P1.027.

Bad loans accounted for 1.81 percent of total portfolio, flat compared to the previous year.