Bank of the Philippine Islands reported a slight improvement in its net income for the first half of 2021 but noted strong growth for the second quarter of the year due to lower provisions recognized.
In a disclosure to the Philippine Stock Exchange, the bank said it generated a net income of P11.8 billion for the first half of 2021, up 1.2 percent year-on-year.
It registered a net income of P6.8 billion for the second quarter of 2021, up 28.8 percent, from the same period last year and up 36.3 percent from the first quarter of 2021. It is the Bank’s highest quarterly income since the start of the pandemic.
Total revenues for the first six months of the year declined by 6.7 percent to P48.1 billion.
Net interest income dropped by 6.6 percent to P33.9 billion, as net income margin contracted by 24 basis points from 3.56 percent to 3.32 percent as earning asset yields declined by 85 basis points.
While non-interest income was down by 7.1 percent to P14.3 billion largely due to lower trading income, fees and commissions showed a growth of 37.2 percent across fee-based businesses.
Total operating expenses for the first semester at P24.1 billion was up 3.0 percent. Cost-to-income ratio stood at 50.1 percent, a 4.75 percentage point increase from the 45.3 percent recorded in the prior year.
The Bank booked provisions of P6.5 billion, lower by 55.7 percent than the P14.7 billion booked over the same period last year. Non-performing loan ratio was 2.94 percent, with NPL coverage ratio at 120.3 percent.
Total loans as of June 30, 2021 was P1.4 trillion, a 4.5 percent drop year-on-year, due to softer demand in corporate, SME, and auto loans.
Total Deposits was down by 4.5 percent year-on-year at P1.7 trillion. Notably, current and savings accounts (CASA) grew 10.7 percent, offsetting a 43.1 percent decrease in time deposits.
The Bank’s CASA Ratio was 83.2 percent, while the loan-to-deposit ratio was 80.8 percent.
Total assets stood at P2.2 trillion, down 3.0 percent year-on-year. Total equity increased to P285.8 billion, with an indicative Common Equity Tier 1 Ratio of 16.95 percent and a Capital Adequacy Ratio of 17.82 percent, both above regulatory requirements. Return on Equity was 8.4 percent, while Return on Assets was 1.1 percent.