Banks’ net profits up 35% in Q3

Banks’ cumulative net profits rose 35 percent to P168.21 billion as of the end of the third quarter this year compared to P124.55 billion same time in 2020, according to the central bank.

Philippine big banks continue to have sufficient capital amid the pandemic

During this period, banks’ bad debts written off amounted to P6.36 billion which was 126.15 percent higher than the previous year’s P2.81 billion, based on Bangko Sentral ng Pilipinas (BSP) data. The big banks or the universal and commercial banks accounted for P6.34 billion of the write-offs.

From January to September the industry’s net interest income fell by 3.96 percent to P485 billion versus P505.29 billion while its non-interest income also declined by 5.07 percent to P164.57 billion from P173.37 billion.

The 46 big banks reported a combined P155.86 billion net profits as of end-September, up by 37.15 percent from P113.64 billion.

Thrift banks’ net profits also rose by 17.28 percent to P9.82 billion from P8.37 billion.

Both the BSP and the banking industry continue to expect double-digit growth in assets, loans, deposits, net income, money and capital market investments for the next two years.

BSP Governor Benjamin E. Diokno has said that domestic banks are resilient enough to withstand tighter global financial conditions with policy normalization.

Diokno said the banking system’s level of capital and liquidity buffers will enable the industry to cushion the impact of an asynchronous global recovery.

Based on the BSP’s internal stress test estimates, the industry’s bank capital can withstand and buck the impact of policy normalization such as higher US market rates and exchange rate pressures.