BPI books double-digit profit growth

MANILA, Philippines — Ayala-led Bank of the Philippines Islands (BPI) posted a double-digit growth in earnings last year as the country continues to recover from the impact of the pandemic.

During the listing of the bank’s P27 billion fixed rate bonds on the Philippine Dealing and Exchange Corp. (PDEx), BPI chairman Jaime Augusto Zobel de Ayala said the country is slowly moving out of the global health crisis.

“And now, as we move out of the pandemic, we need everyone to row the boat together. The environment is still difficult. But many of us are seeing some sunshine at the end of the tunnel,” Zobel said.

Zobel said he believes that opportunities would continue to open up and the 170-year- old bank would continue to support the country and the community in allowing the growth agenda to return.

“We at BPI remain committed to everything the Philippine needs, the banking community, our clients and we intend to stay strong and support the growth as we move forward,” Zobel said.

The bank reported an 11.6 percent growth in net income to P23.88 billion last year after slumping by 26 percent to P21.4 billion in 2020 due to uncertainties brought about by the pandemic.

The Philippines emerged from the pandemic-induced recession with a gross domestic product (GDP) growth of 5.6 percent last year, slightly above the government’s five to 5.5 percent target.

For 2021, BPI reported a 4.2 percent decline in total revenues to P97.4 billion from P101.9 billion.

The bank’s net interest income slipped by 3.7 percent to P69.58 billion from P72.3 billion, driven by the 19-basis point decline in net interest margin to 3.3 percent from 3.49 percent.

Likewise, non-interest earnings contracted by 5.5 percent to P27.82 billion from P29.7 billion due to lower trading income but this was tempered by a 23.2 percent boost in fee income, with the performance rebound in most business lines surpassing 2019 levels.

BPI reported a 5.4 percent increase in operating expenses to P50.73 billion from P48.1 billion due to higher technology cost, resulting to a 52.1 percent cost-to-income ratio.

Amid the improvement in the bank’s non-performing loan (NPL) ratio to 2.49 percent last year from 2.68 percent in 2020, BPI’s provisioning for potential loan losses plunged by 53.1 percent to P13.13 billion from P28 billion, translating to an NPL coverage ratio of 136.1 percent.

Its loan book inched up by 4.9 percent to P1.48 trillion from P1.4 trillion due to higher mortgage, credit card, and microfinance loans, while deposits posted a 13.9 percent increase to P1.96 trillion from P1.7 trillion.

The total assets of BPI improved by 8.4 percent to P2.42 trillion, while total equity increased to P293.06 billion, with an indicative common equity tier 1 ratio of 15.8 percent and a capital adequacy ratio of 16.7 percent, both comfortably above regulatory requirements.

Its return on equity was 8.4 percent, while return on assets stood at 1.1 percent.

For the fourth quarter of last year alone, the earnings of BPI jumped by 51.2 percent to P6.4 billion from P4.2 billion in the same quarter last year as improving mobility conditions led to higher transaction volumes that fueled the sequential 9.7 percent quarter-on-quarter growth in revenues.

BPI’s merger with wholly owned BPI Family Savings Bank took effect last Jan. 1 and is expected to be completed by the end of 2022.