Bank of the Philippine Islands, the financial services arm of the Ayala Group, reported a 73 percent jump in net income to P20.4 billion in the first half of 2022 on the back of higher revenues and lower provisions.

In a disclosure to the Philippine Stock Exchange, the bank said this result is inclusive of a net gain on sale of property and tax adjustments due to the CREATE Law.

Excluding the impact of the asset sale and tax adjustments, net income stood at P16.7 billion, up 24.0 percent for the period.

Total revenues for the first half of the year increased by 19.8 percent year-on-year to P57.6 billion driven by the 16.2 percent growth in net interest income to P39.3 billion on the back of 14.4 percent loan growth and a 15-basis point expansion in net interest margin to 3.46 percent.

Non-interest income was also up 28.4 percent to P18.3 billion as fee income increased 42.2 percent year-on-year, slightly tempered by notably lower securities trading gains which came off a high base last year.

Total operating expenses for the first semester was P25.8 billion, higher by 7.3 percent compared to the previous year, with investments in technology as the main accelerator.

Cost-to-income ratio was 44.8 percent. Excluding the income from asset sale, cost-to-income ratio stood at 49.1 percent.

The Bank recognized provisions of P5.0 billion for the first half of the year, a 23.1 percent reduction from the P6.5 billion booked over the same period last year.

Non-performing loan ratio further improved to 1.99 percent and NPL coverage ratio stood at a comfortable 170.7 percent.

“The sustained strong metrics in asset quality resulted in a continued decline in credit cost, to 66 basis points, towards pre-pandemic levels. Return on Equity was 13.98 percent, while Return on Assets was 1.71 percent,” said BPI.

For the second quarter of the year, the Bank recorded the highest quarterly net income of P12.5 billion, up 82.9 percent year-on-year.

Total revenues reached P32.3 billion for the quarter, up 35.6 percent on robust performances from net interest income and non-interest income.

Excluding the impact of the asset sale, it was nonetheless still a record revenue of P27.3 billion and record income of P8.7 billion for the second quarter of 2022.

Total loans as of June 30, 2022 was P1.6 trillion, a 14.4 percent growth year-on-year, due to higher loan volumes across the board, led by growth in the corporate and SME, credit card, and auto portfolios of 16.3 percent, 16.5 percent, and 5.9 percent, respectively.

Total deposits grew 18.3 percent year-on-year to P2.0 trillion. The Bank’s CASA increased by 12.6 percent with a CASA Ratio of 79.2 percent, while the Loan-to-Deposit Ratio was 78.1 percent. Both loan and deposit volumes remain above pre-pandemic levels.

Total assets reached P2.5 trillion, up 13.1 percent versus the same period last year. Total equity stood at P304.1 billion, with an indicative Common Equity Tier 1 Ratio of 16.0 percent and a Capital Adequacy Ratio of 16.9 percent, both above regulatory requirements.