Big banks’ earnings rise 26.7% in Q1

MANILA, Philippines — The profit of universal and commercial banks operating in the Philippines went up by 26.7 percent to P61.38 billion in the first quarter   from P48.44 billion in the same quarter last year, according to  the Bangko Sentral ng Pilipinas (BSP).

Preliminary data from the BSP also showed the operating income of big banks rose by eight percent to P200.22 billion from January to March   compared to P185.38 billion in the same period last year.

The industry’s net interest income increased by 8.2 percent to P149.66 billion from P138.29 billion as interest earnings went up by 5.7 percent to P173.65 billion from P164.19 billion, while interest expenses declined by 7.1 percent to P23.96 billion from P25.79 billion.

Likewise, the non-interest earnings of big banks grew by 7.4 percent to P50.55 billion from P47.09 billion as fees and commissions increased by 7.4 percent to P24.75 billion from P23.04 billion, while other income more than tripled to P15.23 billion from P5.34 billion.

These were enough to offset the 91 percent plunge in trading income to P414.5 million in the first quarter from P4.5 billion as well as the 66.8 percent drop in profits on the sale of other assets to P6.07 billion from P18.29 billion.

The non-interest expenses of big banks inched up by 4.9 percent to P114.34 billion from P109 billion.

According to the BSP, the industry’s provision for credit losses on loans and other financial assets declined by 8.8 percent to P18.79 billion from January to March compared to P20.61 billion in the same period last year as the economy continues to reopen from strict COVID-19 lockdowns.

Likewise, the soured loans written off by universal and commercial banks fell by 72.5 percent to P939.27 million from P3.42 billion

Sy-led BDO Unibank reported a 13 percent increase in net income to P11.7 billion in the first quarter, followed by state-run Land Bank of the Philippines with a 141 percent jump to P13.2 billion, Ty-led Metropolitan Bank & Trust Co. (Metrobank) with a 27.1 percent surge to P7.8 billion, Ayala-owned Bank of the Philippine Islands (BPI) with a 60 percent jump to P8 billion, and Lucio Tan’s Philippine National Bank (PNB) with a 57 percent increase to P2.8 billion.

The country’s big banks bounced back last year as earnings jumped by 45.5 percent to P207.45 billion from P142.56 billion in 2021 after plunging by 32.6 percent from P211.56 billion in 2020 due to the uncertainties brought about by the   pandemic.

The country emerged from the pandemic-induced recession that stretched through five quarters with a gross domestic product (GDP) growth of 5.7 percent last year.

The Philippines posted a stronger-than-expected GDP growth of 8.3 percent in the first quarter, well within the seven to nine percent target set by the Cabinet-level Development Budget Coordination Committee (DBCC) for 2022.

BSP Governor Benjamin Diokno earlier said that the Philippine banking system remained sound amid the global health crisis, as banks remained profitable and well capitalized.

“On the Philippine banking system, banks in the country have remained sound and stable throughout the   pandemic, with liquidity and credit conditions supportive of growth and well above regulatory requirements,” Diokno said.