DEVELOPMENT Bank of the Philippines (DBP) saw its net profit decline by 62% in the first quarter due to higher expenses.
The bank’s net income in the January to March period was at to P547.83 million, down from the P1.455 billion booked in the same quarter a year earlier, based on DBP’s financial report published on its website.
Net interest income after provisions for losses inched up 0.25% to P3.94 billion. This was due to higher interest expenses, which offset the improvement in its interest income.
Meanwhile, non-interest income increased 16% to P812.509 million in the January to March period from P699.426 million a year earlier.
Operating expenses climbed by nearly a third (32%) to P3.684 billion from P2.79 billion in the first quarter last year.
The bank set aside provisions for impairment losses worth P403.642 million, down by 23.5% against the P527.865 billion in the same period last year.
On the other hand, its provisions for income tax rose 37% to P520.479 billion from P378.893 billion a year ago.
The state-owned lender’s loan portfolio rose 12% to P414.72 billion in the first three months of 2021 from P371.01 billion a year ago, DBP President and Chief Executive Officer Emmanuel G. Herbosa said in a statement.
“The increase in loans to priority sectors reflects the bank’s firm commitment to ensure the steady and gradual recovery of the national economy, despite the looming uncertainties of the current public health emergency,” Mr. Herbosa said.
More than half or 53% of the loans, equivalent to P218.65 billion, went to infrastructure and logistics projects. Other sectors such as social services and community development initiatives (P82.56 billion); environmental projects (P44.72 billion); and micro, small and medium enterprises (P32.79 billion) also received loans from DBP.
Meanwhile, deposits with the bank climbed 57% to P879.83 billion in the first quarter from P559.68 billion a year earlier. Mr. Herbosa said this was “driven by renewed public confidence in the stability of DBP as a strong and stable government financial institution”.
DBP’s total equity rose 26% to P76.64 billion in the January to March period from P61.1 billion the previous year. This was mainly backed by the P12.5-billion capital infusion for the bank granted under the Republic Act 11494 or the Bayanihan to Recover as One Act.
Through the capital infusion, DBP’s Rehabilitation Support Program on Severe Events (RESPONSE) was able to provide P6.4 billion in credit assistance to 29 borrowers. The bank was also able to restructure loans of 41 borrowers with loans worth P5.7 billion through RESPONSE.
Meanwhile, the program also provided assistance to 13 small business borrowers with total loan approvals of P2.3 billion.
“We shall continue to leverage on our recent financial gains such as being a trillion-peso bank and utilize our expanded asset base to create a myriad of viable and sustainable set of opportunities for our clients and for our fellow Filipinos,” Mr. Herbosa said.
Based on central bank data, DBP, the country’s designated infrastructure bank, was the sixth largest lender with assets worth P1.102 trillion at end-March. — LWTN