Zobel-controlled Bank of the Philippine Islands (BPI) reported a record high net income, driven by revenues and lower provisions which offset the increase in operating expenses.

In a disclosure to the Philippine Stock Exchange (PSE), the bank said its net income rose 30.5 percent to an all-time high of P51.7 billion last year from P39.6 billion in 2022.

Excluding the impact of the one-off gain from the 2022 property sale, net income would be up 44.1 percent. 

Fourth-quarter net income was P13.1 billion, up 44.3 percent year-on-year, also on higher revenue growth and lower provisions recognized. 

BPI said its solid financial performance is a reflection of its strengthened customer franchise and deeper customer engagement which led to record volumes and market share gains in several businesses. 

For the full year 2023, return on equity was 15.35 percent and return on assets was 1.93 percent.

Total revenues soared 16.7 percent to P138.3 billion year-on-year, attributable to the 22.7 percent increase in net interest income to P104.4 billion, as average asset base expanded 7.7 percent and net interest margin widened 50 basis points to 4.09 percent. 

Non-interest income improved 1.5 percent to P34 billion, on the back of record trading income gains of P5.2 billion, up 37 percent year-on-year, tempered by the three percent decline in fee income to P28.8 billion.

Removing the impact of the 2022 one-off transaction, fee income would be higher by P4.1 billion or 16.6 percent, on higher fees from credit cards, various service charges, and bancassurance.

Operating expenses increased 19.2 percent to P69.1 billion, led by higher manpower, technology, and marketing costs, resulting in a cost-to-income ratio of 50 percent.

The bank booked provisions of P4 billion, a 56.4 percent reduction from last year. Asset quality remains strong with NPL ratio at 1.84 percent, with sufficient NPL coverage at 156.1 percent as of the end of the year.

Total loans stood at P1.9 trillion, a 10.5 percent increase over the previous year, due to the strong growth across all portfolios. 

Total deposits stood at P2.3 trillion, up 9.5 percent year-on-year, mainly from the growth in time deposits which tempered the decline in CASA. The CASA Ratio stood at 67 percent and the loan-to-deposit ratio at 82 percent.

Total assets reached P2.9 trillion, reflecting a 10.9 percent growth year-on-year. Total equity stood at P357.2 billion, with an indicative common equity tier 1 ratio of 15.3 percent and a capital adequacy ratio of 16.2 percent, both well above regulatory requirements.