BPI net income shrinks 22% to P5 billion in first quarter

Published April 22, 2021, 4:20 PM

by James A. Loyola

Bank of the Philippine Islands posted a 21.7 percent drop in net income to P5.0 billion for the first quarter of 2021 although pre-tax income is higher by 5.1 percent.

In a disclosure to the Philippine Stock Exchange, the bank said the drop is due to one-time tax adjustments in connection with previously booked loan provisions because of the effectivity of the CREATE law.

Total revenues for the first three months of the year declined by 1.5 percent to P24.3 billion as net interest income dropped by 6.5 percent to P16.9 billion, driven by a 31-basis point contraction in net interest margin to 3.31 percent.

Meanwhile, non-interest income increased by 12.1 percent to P7.4 billion on the back of robust fee income, up by 27.8 percent to P5.7 billion.

This boost came from higher fees from the bancassurance, asset management, transaction banking, and investment banking businesses. 

The Bank recognized provisions of P3.6 billion as of March 31, 2021, lower by 12.7 percent than the P4.1 billion booked over the same period last year. NPL ratio was 2.76 percent, with NPL coverage ratio at 123.5 percent. 

Total Loans as of March 31, 2021 was P1.4 trillion, a 5.0 percent decline year-on-year, due to softer demand across most loan products, except for mortgage and microfinance which registered growth rates of 10.9 percent and 10.5 percent, respectively.

Total Deposits was flat year-on-year at P1.7 trillion. Notably, CASA grew 11.9 percent, offsetting a 34.4 percent decrease in time deposits. The Bank’s CASA Ratio was 82.6 percent, while the Loan-to-Deposit Ratio was 81.6 percent. 

Total assets stood at P2.2 trillion, almost flat year-on-year. Total equity increased to P280.8 billion, with an indicative Common Equity Tier 1 Ratio of 16.6 percent and a Capital Adequacy Ratio of 17.5 percent, both above regulatory requirements. Return on aquity was 7.2 percent, while return on Assets was 0.93 percent.