BANK of the Philippine Islands booked a higher net income in the second quarter as it set aside less loan loss provisions. — BW FILE PHOTO
BANK OF THE Philippine Islands (BPI) recorded a higher net profit in the second quarter as it set aside less provisions for bad loans, which helped offset the decline in its income from its core businesses.
The bank’s net income stood at P6.8 billion in the quarter ending June, 28.8% higher than the P5.375 billion posted in the same period last year, it said in a disclosure to the stock exchange on Thursday.
This brought its net earnings for the first half to P11.8 billion, up by 1.2% from the P11.756 billion seen a year ago.
Its end-June performance translated to a return on equity of 8.4%, while return on assets was at 1.1%.
BPI’s revenues in the first semester went down by 6.7% to P48.1 billion.
Net interest income dropped by 6.6% to P33.9 billion as its net interest margin contracted by 24 basis points to 3.32% from 3.56% amid a decrease in earning asset yields.
Meanwhile, the lender’s non-interest earnings fell by 7.1% to P14.3 billion, mainly due to lower trading income. On the other hand, fees and commissions climbed by 37.2% across its fee-based businesses.
BPI’s total operating expenses from January to June went up by 3% to P24.1 billion from a year earlier. Its cost-to-income ratio increased to 50.1% from 45.3%.
The bank’s provisions for credit losses declined by 55.7% to P6.5 billion at end-June from P14.7 billion last year as it set aside more reserves in 2020 at the start of the coronavirus pandemic.
BPI’s loan portfolio slipped by 4.5% to P1.4 trillion as of June due to softer demand for corporate, small and medium enterprises, and auto credit.
Its nonperforming loan (NPL) ratio stood at 2.94% at end-June, higher than the 1.83% seen a year earlier. NPL coverage ratio was at 120.3%.
Meanwhile, deposits with the bank dropped by 4.5% year on year to P1.7 trillion. Current account, savings account (CASA) deposits increased by 10.7%, partly offsetting the 43.1% decrease in time deposits. BPI’s CASA ratio stood at 83.2%.
The bank’s loan-to-deposit ratio was at 80.8%.
BPI’s assets went down by 3% to P2.2 trillion as of June, while total equity was at P285.8 billion. Its common equity Tier 1 ratio stood at 16.95% while its capital adequacy ratio was at 17.82%, both beyond the minimum requirement of the central bank.
The Ayala-led bank’s shares closed at P87.50 apiece on Thursday, up by P3.20 or by 3.8% from its previous finish. — L.W.T. Noble