Philippines banks’earnings jump 28% in 2019

MANILA, Philippines — Earnings of Philippine banks jumped by 28.2 percent to P230.42 billion last year from P179.71 billion in 2018 on the back of higher interest income and trading gains.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the banking industry’s total operating income went up by 17.9 percent to P788.02 billion from P668.1 billion.

The net interest income of banks operating in the country reached P598.75 billion, 16.1 percent higher from P515.59 billion. Interest income jumped by 24.1 percent to P878.46 billion from P708.01 billion, while interest expense surged by 46.2 percent to P279.42 billion from P191.09 billion.

Financial institutions continued to earn more from their expanded loan books that are funded by low-cost deposits as well as trading from fees and commissions as well as sale and redemption of securities.

The non-interest income of Philippine banks went up by 24.1 percent to P189.27 billion from P152.51 billion on the back of higher earnings from fees and commissions as well as trading gains.

Fees and commission income increased by 8.7 percent to P99.81 billion last year from P91.79 billion in 2018.

Likewise, the trading income zoomed by 72.3 percent to P72.65 billion from P42.17 billion as realized gains the sale of securities amounted to P72.65 billion, reversing the previous year’s net loss of P2.89 billion.

The profit was enough to erase the 6.5 percent decline in foreign exchange profit to P8.5 billion from P9.1 billion.

The peso has rallied back to the 50 to $1 level after emerging as the third worst performing currency last year shedding 5.3 percent to 52.58 to $1 in 2018 from 49.93 to $1 in 2017.

Profits of universal and commercial banks or big banks surged by 32.3 percent to P211.57 billion from P159.93 billion, while earnings of thrift banks or mid-sized banks fell 11 percent to P14.47 billion from P15.83 billion.