BPI earnings up 1.3% to P4.98 B in Q1

MANILA, Philippines – Earnings of Ayala-led Bank of the Philippine Islands (BPI) inched up by 1.3 percent in the first quarter of the year amid strong results from core lending business, non-interest income and securities trading.

The country’s third largest bank in terms of assets reported its net income amounted to P4.98 billion from January to March this year or about P60 million higher compared with P4.92 billion recorded in the same period last year.

BPI’s comprehensive income grew faster at 12.6 percent to P5.65 billion in the first quarter of the year.

Total revenues of the 164-year-old bank rose 4.9 percent to P15.27 billion in the first quarter of the year.

BPI reported its net interest income went up six percent to P10 billion while non-interest earnings inched up 2.8 percent to P5.27 billion.

The listed bank traced the increase in earnings to the 22.1 percent jump in securities and foreign exchange trading gains to P1.2 billion in the first quarter of the year amid the improving markets.

Higher regulatory and marketing-related costs padded by bank’s operating expenses by 7.3 percent to P7.85 billion in the first quarter of the year.

BPI president and chief executive officer Cezar Consing earlier said 2016 is “shaping up very solidly” for the bank amid a sustained and deliberate focus on client needs.

“This year is shaping up very solidly. For our first quarter, we are beginning to see the work that we put into focusing on the client. It is beginning to pay off,” Consing said.

Over the last three years, Consing said BPI has de-risked the bank gradually reducing its held-for-trading and available-for-sale positions by 23 percent to P50 billion last year from P129 billion in 2012.

The bank’s market-sensitive position had been reduced to 17 percent last year from a high of 63 percent in 2012 amid the 13 percent rise in investments in securities to P295 billion from P205 billion during the period.

In end-March, the bank’s investment securities rose 15.6 percent to P301.84 billion as its investment portfolio continues to be heavily-weighted in held-to-maturity securities, at P253.79 billion.

“Interest rates being the way they are, we saw less opportunity to take market risks. Market risks are now a smaller component of our business and we replaced that with client business,” Consing said earlier.

BPI reported an 18 percent increase in total loans to P861.22 billion with corporate clients accounting for 78 percent and retail borrowers cornering the remaining 22 percent.

 Amid the rise in loan portfolio, the bank’s gross 90-day non-performing loan improved to 1.69 percent while its reserve cover reached 114.2 percent.

The Ayala-led financial institution reported that its deposit base expanded by 12.1 percent to P1.3 trillion in the first quarter of the year.

The bank’s total resources climbed by 8.6 percent to P1.54 trillion while its total capital went up 7.1 percent to P155.99 billion for a capital adequacy ratio of 13.9 percent and a common equity tier 1 of 13 percent.