Banks’ profit up 44% to P243 billion in 9 months

MANILA, Philippines — The profit of banks operating in the Philippines jumped by 43.7 percent to P243.06 billion from January to September compared to last year’s P169.09 billion, according to the Bangko Sentral ng Pilipinas (BSP).

Banks’ operating income increased by 14 percent to P750.22 billion during the nine-month period from P658.23 billion in the same period last year.

The sector’s net interest income increased by 8.8 percent to P542.5 billion from P491.88 billion as interest earnings went up by 10.3 percent to P636.45 billion from P580.23 billion, while interest expenses grew at a slower pace of 6.6 percent to P93.64 billion from P87.84 billion.

Likewise, the non-interest earnings jumped by 25 percent to P207.72 billion from P166.35 billion on higher profit from fees and commissions as well as trading income.

Profit from fees and commissions increased by 13 percent to P87.49 billion from P77.38 billion, while trading income soared by 178 to P17.09 billion from P6.15 billion as realized gains from foreign exchange transactions surged by 163 percent to P8.43 billion from P3.2 billion.

These were enough to wipe out the 60-percent plunge in profit on the sale of other assets to P26.57 billion from January to September compared P65.56 billion in the same period last year.

According to the BSP, the non-interest expenses of banks inched up by seven percent to P406.62 billion from P379.97 billion.

As the economy continues to recover from the pandemic-induced recession, Philippines banks are allocating less provision for credit losses.

During the nine-month period, provision for bad debts dropped by 15 percent to P77.4 billion from P91.16 billion in the same period last year, while the amount of soured loans written off plunged by 64 percent to P2.29 billion from P6.37 billion.

For universal and commercial banks, their net income jumped by 45.7 percent to P227.11 billion in the first nine months from a year-ago level of P155.86 billion.

Sy-led BDO Unibank reported a 24-percent jump in net income to P40 billion from January to September, followed by Ayala-led Bank of the Philippine Islands with 74.3 percent to P30.5 billion, and Ty-led Metropolitan Bank & Trust Co. with a 45-percent increase to P23.4 billion.

Philippine banks bounced back last year as earnings surged by 44.8 percent to P224.75 billion from P155.22 billion in 2021 after plunging by 32.67 percent from P230.67 billion in 2020 due to the uncertainties brought about by the pandemic.