BPI profit jumped 23% in H1 2023
MANILA -The Ayala Groups’ Bank of the Philippine Islands (BPI) grew first semester profits by 23 percent to P25.1 billion, with the upswing driven by higher margins as lending rates continued to rise.
BPI, the country’s third-largest lender, said earnings growth was also driven by a larger asset base and a steep drop in costs associated with uncollectible debts. Total revenue rose 13.8 percent to P65.6 billion.
From January to June, BPI said net interest income added 27.4 percent to P50.1 billion while assets expanded by 9.2 percent. It also reordered an increase in net interest margin by 56 basis points to 4.03 percent.
Loans rose 10.5 percent to P1.7 trillion. Corporate and auto loans grew 8 percent and 20.4 percent while credit card debt surged 42.7 percent.
This offset a slowdown in non-interest income, which shed 15.4 percent to P15.4 billion during the period due to the absence of gains from the sale of property last year.
BPI said credit provisions plunged 60 percent to P2 billion as it ended the period with a non-performing loan ratio of 1.88 percent and an NPL coverage rate of 167.44 percent.
Total operating expenses during the period grew about 21 percent to P31.4 billion. This was mainly due to “structural and one-time salary increases, continued investments in digitalization programs, and various marketing campaigns, rewards, and other selling expenses”.
BPI closed the first semester with a return on equity of 15.5 percent and a cost-to-income ratio of 47.9 percent.
Meanwhile, the bank’s total assets grew 8.9 percent to P2.7 trillion while total deposits expanded by 7.6 percent to P2.1 trillion, mostly from current and savings accounts. The ratio measuring loans to deposits stood at 80.2 percent, BPI added.
Total equity during the first semester stood at P336.1 billion, with an indicative common equity tier 1 Ratio of 15.5 percent and a capital adequacy ratio of 16.4 percent, which were above regulatory requirements.