BPI posts lower profit after bad debt provisions

Published October 23, 2020, 5:00 AM

by James A. Loyola

Bank of the Philippine Islands reported a 22.1 percent drop in net income to P17.17 billion for the first nine months of 2020 from the P22.03 billion registered in the same period last year due to huge provisioning for bad debt.

In a disclosure to the Philippine Stock Exchange, BPI said it booked P21.06 billion in provisions for loan losses in the first nine months of 2020 in anticipation of an increase in non-performing loan (NPL) levels in light of the continued weakness in the economic landscape.

This provision is 4.6 times  more than the P4.58 billion set aside during the same period in 2019. 

Total revenues for the nine-month period increased by 9.7 percent to P77.88 billion as net interest income grew by 11.8 percent to P54.40 billion.

This came on the back of a 5.7 percent expansion in average asset base supported by an 18-basis point widening in net interest margin to 3.51 percent.

Non-interest income reached P23.48 billion, higher by 5.1 percent versus 2019 levels, primarily from robust securities trading gains. 

Total loans as of September 30, 2020 reached P1.38 trillion, increasing by 0.9 percent year-on-year, with growth led by the mortgage and corporate loan segments at 8.7 percent and 2.6 percent, respectively.

Total deposits increased to P1.68 trillion, up 4.0 percent year-on-year, boosted by CASA (current account and savings account) deposits which grew by 14.7 percent. The bank’s CASA Ratio was 76.2 percent, while the Loan-to-Deposit Ratio was 82.1 percent. 

Total assets stood at P2.20 trillion as of September 30, 2020, 3.6 percent higher year-on-year. Total Equity amounted to P283.44 billion, with an indicative Common Equity Tier 1 Ratio of 15.46 percent and a Capital Adequacy Ratio of 16.35 percent, both well above regulatory requirements. 

Return on Equity was 8.32 percent, while Return on Assets was 1.05 percent.