By James A. Loyola
The Bank of the Philippine Islands (BPI) posted 5.7 percent dip in net income to P11.03 billion for the first half of 2018 due to lower non-interest income and higher costs.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said total revenues of P37.22 billion were driven by strong net interest income of P26.21 billion in the first half of 2018, up by 11.5 percent on account of a 9.3 percent increase in average asset base and net interest margin (NIM) expansion of 8 basis points.
Interest income from loans grew by 21.1 percent year-on-year driven by a 16 basis points improvement in loan yields. However, cost of funds increased by 17 basis points for the period partly due to the higher documentary stamp tax (DST) on deposits.
Total loans stood at P1.22 trillion, higher by 15.7 percent year-on-year driven primarily by strong growth in corporate loans and credit cards at 17.1 percent and 22.7 percent, respectively.
Total deposits reached P1.53 trillion, up by 7.2 percent, with current and savings accounts (CASA) registering faster growth at 10.0 percent. The Bank’s CASA ratio stood at 75.3 percent while the loan-to-deposit ratio (LDR) was at 79.7 percent.
Lower income from securities trading, trust and investment management and assets sales contributed to a 6.9 percent year-on-year decline in total non-interest income from P11.82 billion in the first semester 2017 to P11.01 billion in the first semester 2018.
The Bank registered higher revenues from credit card fees and rental income.
Provision for loan losses for the first semester 2018 amounted to P1.91 billion, 22.2 percent lower than 2017’s first half. The lower provisioning level is based on the Bank’s Expected Credit Loss models under PFRS9 which showed relatively benign increases in potential impairment losses.
Operating expenses which totaled P21.22 billion was higher by 16.3 percent year-on-year on accelerated spending on manpower, premises and technology. (JAL)