Profits of investment houses, financing firms slip 6% in H1

MANILA, Philippines - Earnings of non-banks with quasi banking functions slipped six percent in the first six months of the year due to lower profits booked by investment houses, the Bangko Sentral ng Pilipinas (BSP) reported recently.

Statistics showed profits of non-banks with quasi banking functions amounted to P2.96 billion from January to June this year, P190 million lower compared to P3.15 billion registered in the same period last year.

Net interest income went up 8.4 percent to P6.47 billion in the first half of the year from P5.97 billion in the same period last year.

On the other hand, non-interest income of non-banks with quasi banking functions fell 26.4 percent to P2.93 billion from P3.98 billion as trading income plunged 77.6 percent to P244 million from P1.09 billion.

Operating expenses grew 10.8 percent to P6.04 billion in the first half of the year from P5.45 billion in the same period last year as provisioning went up 19.5 percent to P1.84 billion from P1.54 billion

The net income of investment houses declined 20.7 percent to P912 million from P1.15 billion. Net interest income jumped 46.6 percent to P1.01 billion from P689 million, while non-interest income plunged 34.7 percent to P1.54 billion from P2.36 billion.

Trading income of investment houses plunged 78.5 percent to P236 million from P1.1 billion.

Operating expenses of investment houses inched up by 5.5 percent to P1.03 billion from P1.09 billion.

On the other hand, earnings of financing companies inched up 2.5 percent to P2.04 billion in the first six months of the year from P1.99 billion in the same period last year.

Net interest increased 16.8 percent to P6.17 billion from P5.28 billion, while non-interest income fell 15.3 percent to P1.38 billion from P1.63 billion.

Expenses of financing companies climbed 8.2 percent to P5.01 billion from P4.63 billion.

Non banks with quasi banking functions are non-bank financial institutions authorized by the BSP to borrow funds from 20 or more lenders for their own account through issuances, endorsement or assignment with recourse or acceptance of deposit substitutes for purposes of re-lending or purchasing receivables and other obligations.

Only non banks with quasi banking functions and those without quasi_banking function but are either subsidiaries or affiliates of banks are subject to BSP supervision.

The total number of non banks with quasi banking functions reached 75 last year consisting of 12 head offices and 63 other offices or branches.

The 12 operating non banks with quasi banking functions in the country comprise of five investment houses, six financing companies, and one other non-bank with quasi-banking function.

Eight non banks with quasi banking functions are linked to universal and commercial banks.