BPI’s 9-month profit hits record P38.6B

MANILA  -The Ayala Group’s Bank of the Philippine Islands (BPI) is closing in on another banner year after net income during the first nine months of 2023 jumped 26.4 percent to a record P38.6 billion.

Earnings, which pushed up the bank’s return on equity to 15.6 percent, were driven by stronger net interest income and margins as well as lower credit provisions, which came despite a slight uptick in bad debts, a stock exchange filing on Thursday showed.

BPI, the country’s third-largest lender, booked total revenue of P100.9 billion, up 15.9 percent. Net interest income rose 24.5 percent to P76.8 billion.

The bank saw total loans increase 8.8 percent to P1.7 trillion during the period. Its corporate, credit card, and auto portfolios expanded by 5.3 percent, 37.7 percent, and 22.3 percent, respectively.

Non-interest earnings slipped 6.6 percent to P24.1 billion due to the absence of gains from a one-time asset sale. Core non-interest earnings would have increased by 15.7 percent to P3.3 billion, BPI noted.

The lender also noted that asset quality “slightly weakened from last year and the previous quarter” as measured by its non-performing loans (NPL) ratio of 1.97 percent. This compares to 1.94 percent last year and 1.88 percent as of the first semester of 2023.

It maintained a 158.95-percent coverage ratio for bad debts while credit provision expenses were down 60 percent to P3 billion versus the same period last year.

BPI booked overall operating expenses of P48.6 billion, up 21.3 percent due to larger spending for manpower, technology, and marketing. Its cost-to-income ratio thus ended the period at 48.2 percent.

Meanwhile, total assets grew by 7.2 percent to P2.7 trillion over the same period last year, translating to a return on assets of 1.95 percent. BPI’s deposits likely added 6.7 percent to P2.2 trillion. The total loan to deposit ratio ended the period at 80.2 percent.

Total equity stood at P349.6 billion with an indicative common equity tier 1 ratio of 16.1 percent and a capital adequacy ratio of 17 percent— both above regulatory requirements.