BPI net income jumps 52% to P9.4 billion in H1

MANILA, Philippines - Ayala-controlled Bank of the Philippine Islands (BPI) reported yesterday a net income of P9.4 billion for the first half of 2012, a 52 percent jump from the P6.2 billion profit in the same period last year.

In a report to the Philippine Stock Exchange, BPI said this translated to a 21 percent return on equity and a 2.3 percent return on assets.

For the second quarter alone, the bank’s net income reached P3.6 billion, eight percent higher than a year ago due to the 9.4 percent increase in net interest income although tempered by a higher tax line.

The bank said its non-interest income and operating expenses were relatively flat against the same quarter last year.

For the first semester, the significant growth in profits was mainly driven by the 24 percent improvement in revenues.

Net interest income rose nine percent while non-interest income surged 51 percent.

BPI said the improvement in net interest income was driven by the combined effect of a P32-billion increase in average asset base and a 14 basis points improvement in net spreads.

Its non-interest income, on the other hand, was boosted by the extraordinary level of trading gains realized in the first quarter of the year as the bank sold down its securities inventory.

Operating expense growth slowed down to nine percent with increases registered across all categories. Impairment loss and income taxes remained ahead of the previous year by P438 million and P159 million, respectively.

Loan growth from all segments was sustained as net loan portfolio reached P480 billion, 17 percent higher than a year ago. Both the middle market and SME segments contributed a 19 percent growth while the top corporate segment went up 15 percent.

BPI’s consumer lending likewise increased 17 percent. Despite the double-digit growth in portfolio, asset quality continued to improve with net 30-day non-performing loan (NPL) ratio at 1.4 percent from last year’s 1.8 percent.

Total intermediated funds amounted to P1.46 trillion as the bank’s total deposits stood at P734 billion with growth coming largely from low-cost deposits. Assets under management reached P730 billion, a 15 percent growth from last year.

BPI’s market capitalization was P265 billion at end June and remains the largest among domestic banks. Its Basel 2 capital adequacy ratio (CAR) registered at 14.5 percent.

Gil A. Buenaventura, BPI senior executive vice president and chief operating officer, said they remain bullish on the prospect of the local banking industry.

“Our outlook is still bullish, the domestic economy continues to be strong. But as I said, there are challenges down the road.” Buenaventura told a press conference yesterday.

 “We are happy to see that loan growth has remained resilient though slightly below the first quarter performance. We expect challenges going forward especially on our net interest margin with the recent cut in the BSP overnight borrowing rate. We will, however, try to seize opportunities given the continued domestic economic growth, notwithstanding the impact of the euro zone slowdown. At this point in time, we are on track with our target of delivering a sustainable 15 percent return on equity,” he said