Forex gains keep Philippine banks profitable

MANILA, Philippines - Earnings of banks operating in the Philippines rose 3.3 percent in the first half as gains from foreign exchange transactions cushioned the sharp drop in trading income, according to preliminary data released yesterday by the Bangko Sentral ng Pilipinas (BSP).

The net income of Philippine banks amounted to P81.8 billion from January to June, P2.61 billion higher than the P79.19 billion profit booked in the same period last year.

The net interest income of the Philippine banking industry booked a double-digit growth of 13.4 percent to P212.67 billion in the first half from P187.55 billion as interest earnings went up 6.3 percent to P278.76 billion from P262.26 billion.

Non-interest income of Philippine banks fell P66.09 billion in the first half from P74.72 billion in the same period last year after the industry’s trading income was cut to almost half at P16.16 billion from P30.84 billion.

Losses from the sales or redemption of securities reached P3.33 billion in the first semester, a complete reversal of the P8.11 billion gains booked in the same period last year.

The drop was cushioned by the 206 percent jump in the realized gains from foreign exchange transactions to P9.54 billion from January to June from P3.12 billion in the same period last year as well as the 197 percent surge in foreign exchange profit to P3.74 billion from P1.26 billion.

Earnings from fees and commissions grew 15.1 percent to P40.88 billion from P35.51 billion.

The industry’s interest expense climbed 8.3 percent to P180.25 billion from P166.42 billion.

Profits of universal and commercial banks or big banks inched up about two percent to P71.84 billion in the first half from P70.52 billion in the same period last year while that of thrift banks jumped 19.1 percent to P8.05 billion from P6.76 billion.