Big banks eke out 4.5% profit growth in 9 months

MANILA, Philippines — Big banks in the Philippines managed to eke out a 4.5 percent growth in earnings in the first nine months despite the sharp drop in the industry’s trading income, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Preliminary data released by the central bank showed profits of universal and commercial banks reached P106.26 billion from January to September, P4.54 billion higher compared to the P101.72 billion recorded in the same period last year.

The interest income of big banks in the country grew 16.8 percent to P270.86 billion in the first nine months from P231.88 billion in the same period last year.

Non-interest booked a double-digit drop of 11 percent to P85.14 billion from P95.59 billion as trading income plunged 42.8 percent to P23.16 billion from P40.5 billion.

Due to the volatile equities and financial markets, data showed losses from the sale or redemption of securities reached P12.63 billion in the first nine months, reversing the gains that amounted to P6.26 billion in the same period last year.

On the other hand, gains from foreign exchange transactions reached P22.56 billion in the first nine months, more than three times the P7.35 billion recorded in the same period last year.

Likewise, foreign exchange profits went up 9.8 percent to P4.81 billion from P4.38 billion as monetary authorities allowed the moderate and gradual weakening of the peso against the dollar.

The interest expenses of universal and commercial banks rose 13.5 percent to P76.47 billion from P67.34 billion, while non-interest expenses increased 9.6 percent to P228.16 billion from P208.03 billion.

BSP Governor Nestor Espenilla Jr. said in his speech during the 11th ING FINEX CFO of the Year awarding ceremony the banking system sustained its growth trajectory through the third quarter of the year.

Data showed assets of Philippine banks grew 14 percent to P14.95 trillion from January to September compared to P13.12 trillion in the same period last year as deposits expanded 15.3 percent to P11.32 trillion from P9.82 trillion.

“Domestic liquidity and credit dynamics are consistent with our expanding economy,” he said.

According to Espenilla, the current pace of credit growth of 19.6 percent is sustainable as credit exposures remain diversified.

Likewise, he added the country’s credit-to-gross domestic product (GDP) ratio of 63.6 percent in the second quarter is still one of the lowest in Asia.