BPI net income surged 52% to P12.1B in Q1
MANILA -The Ayala Groups’ Bank of the Philippine Islands (BPI) saw profits soar in the first quarter of 2023 as total loans expanded by 13.6 percent to P1.7 trillion amid optimism on the economy’s growth prospects for the year.
From January to March this year, BPI saw net income rise 52 percent to P12.1 billion, translating to a return on equity of 15.4 percent. Revenues also increased by more than 25 percent to P31.7 billion.
“The solid performance was attributable to average asset base expansion, margin growth, and lower provisions,” the country’s third-largest lender said in a stock exchange filing on Thursday.
Driving earnings were a 27.2-percent jump in net interest income to P24.2 billion. Assets expanded by 10 percent during the period while net interest margin climbed 52 basis points to 3.94 percent.
Non-interest earnings also expanded by 18.6 percent to P7.6 billion due to higher “credit card billings and charges, securities trading gains, and fees from investment banking project finance deals.”
It also highlighted improving asset quality in the post pandemic period as non-performing loans ratio eased to 1.82 percent from 2.38 percent in March last year.
BPI, which ended the period with an NPL coverage of 176.7 percent, booked provisions of P1 billion during the quarter, which was lower by 60 percent from the same period in 2022.
Moreover, operating expenses grew 19.7 percent to P15.1 billion.
BPI said this was due to “manpower structural increases, milestone payments for digitalization initiatives, targeted marketing campaigns and rewards redemptions, and higher transaction-related processing fees.”
Despite the increase, its cost-to-income ratio eased lower to 47.5 percent.
BPI said total assets in the first quarter expanded by 12.4 percent to P2.7 trillion while return on assets stood at 1.88 percent.
Loans during the period were supported by corporate (+12.6 percent), credit card (38.7 percent), and car loans (+16.4 percent). Total deposits were also up 13.6 percent to P2.1 trillion with over 70 percent coming from current account and savings account deposits.
It ended the quarter with total equity of P331.6 billion and an indicative common equity tier 1 ratio of 15.7 percent and a capital adequacy ratio of 16.6 percent, which were above regulatory requirements.
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