BPI end-June profit up 73% after record Q2 earnings

The Ayala Group’s Bank of the Philippine Islands (BPI) saw first semester profit jump 73 percent to P20.4 billion as earnings in the second quarter reached a record high, backed by strong revenue growth and an asset sale.

BPI said in a statement on Thursday profits were also propped up by the decline in expenses after provisions for bad debts dropped 23.1 percent to P5 billion as COVID-19 restrictions were further relaxed.

The lender likewise recorded gains from the sale of a property in Makati City and tax adjustments due to the Corporate Recovery and Tax Incentives for Enterprises law.

BPI’s first semester earnings were higher by 24 percent to P16.7 billion without the impact of the asset sale and tax adjustments, it noted.

Moreover, total revenues were up almost 20 percent to P57.6 billion from interest and non-interest income sources.

Net interest income increased 16.2 percent to P39.3 billion while non-interest income added 28.3 percent to P18.3 billion. It said fee-based income surged 42.2 percent but this was “slightly tempered by notably lower securities trading gains which came off a high base last year.”

The property sale helped BPI achieve its “highest quarterly net income” of P12.5 billion, up nearly 83 percent. Total quarterly revenues were also up 35.6 percent to P32.3 billion on “robust” net interest income and non-interest channels.

Historic highs

Even without the asset sale, BPI said quarterly revenues and income were still at historic highs of P27.3 billion and P8.7 billion, respectively.

Meanwhile, total operating expense rose 7.3 percent to P25.8 billion in the first semester, mainly due to investments in technology, the statement showed. Without the asset sale, its cost-to-income ratio stood at 49.1 percent.

Nonperforming loans also improved to 1.99 percent while coverage ratio was at 170.7 percent.

Total loans during the period stood at P1.6 trillion, up 14.4 percent, while total assets added 13.1 percent to P2.5 trillion.

BPI said total equity stood at P304.1 billion with an indicative common equity tier 1 ratio of 16 percent and a capital adequacy ratio of 16.9 percent, which the lender said exceeded regulatory requirements.