BPI net income in Q3 up 3% to P5.66B

Ayala-led Bank of the Philippine Islands (BPI) grew its third quarter net profit by 3 percent year-on-year to P5.66 billion, driven by strong fee-based earnings and declining credit cost.

This brought end-September net profit to P17.5 billion, up 1.8 percent year-on-year, as provisioning expense for probable loan losses declined. This January to September bottom line level accounted for about 73 percent of earnings expected by market consensus to be delivered by BPI for full year 2021.

The nine-month performance also brought return on equity to 8.3 percent.

Compared to the second quarter net profit of P6.82 billion, however, earnings declined by 17 percent.

For the third quarter, BPI chief financial officer Maria Theresa Marcial explained on Thursday that the 3-percent year-on-year growth in earnings had been driven by “strong fee income growth, offsetting NIM (net interest margin) contraction and weak corporate loan demand.”

She also cited a decline in bad loans and credit cost, alongside an increase in low-cost deposits.

The third quarter performance was also attributed to the bank’s “increasing digital propensity [as] reflected in higher transaction count and transaction value in digital channels.”

For the nine-month period, BPI’s revenues declined by 6 percent year-on-year to P71.6 billion.

Net interest income fell by 5.6 percent year-on-year to P51.2 billion, as NIM contracted by 20 basis points to 3.31 percent from 3.51 percent, brought about by a decline in yields across loan portfolios and treasury assets.

The bank’s loan book ended September at P1.4 trillion, up by 0.9 percent year-on-year on the back of higher mortgage, credit card and microfinance loans.

Meanwhile, nine-month noninterest income went down by 7 percent year-on-year to P20.5 billion on lower trading income. However, this was cushioned by a 27.2-percent increase in fee income, reflecting the strong recovery across all business lines.

The bank’s provisioning expense declined by 49.9 percent year-on-year at end-September to P10.3 billion as asset quality improved.

BPI’s bad loans to total loans ratio eased to 2.73 percent from 2.98 percent during the same period.

Operating expenses reached P36.5 billion at end-September, up 3.5 percent year-on-year.

Total deposits rose by 6.6 percent year-on-year to P1.8 trillion.

Total assets, meanwhile, stood at P2.3 trillion, up 3.3 percent.