BPI profit hits record high P51.7 billion in 2023

MANILA, Philippines — “The bank’s solid financial performance is a reflection of its strengthened customer franchise and deeper customer engagement which led to record volumes and market share gains in several businesses,”

Ayala-led Bank of the Philippine Islands’ earnings jumped by 30.5 percent to hit an all-time high of P51.7 billion in 2023 from the previous year’s P39.6 billion, driven by record revenues and lower provisions.

Excluding the impact of the one-off gain from a property sale in 2022, the bank’s net income would have surged by 44.1 percent.

“The bank’s solid financial performance is a reflection of its strengthened customer franchise and deeper customer engagement which led to record volumes and market share gains in several businesses,” BPI said in a  statement.

The 172-year-old bank reported a 16.7 percent increase in total revenues to P138.3 billion from P118.5 billion, while net interest earnings soared by 22.7 percent to P104.4 billion as net interest margin widened by 50 basis points to 4.09 percent after a series of aggressive rate hikes delivered by the Bangko Sentral ng Pilipinas.

Likewise, non-interest income inched up by 1.5 percent to P34 billion, on the back of the 37 percent jump in trading income gains to a record P5.2 billion.

This helped temper the three percent decline in fee income to P28.8 billion. Removing the impact of the 2022 one-off transaction, fee income would be higher by 16.6 percent or P4.1 billion on higher fees from credit cards, various service charges and bancassurance.

BPI, which merged with Gokongwei-owned Robinsons Bank Corp. last Jan. 1, also reported a 19.2 percent increase in operating expenses to P69.1 billion from P58 billion, led by higher manpower, technology, and marketing costs, resulting in a cost-to-income ratio of 50 percent.

The bank was able to slash its provision for potential loan losses by 56.4 percent to P4 billion, translating to a non-performing loan (NPL) coverage ratio of 156.1 percent.

BPI’s NPL ratio increased slightly to 1.84 percent in 2023 from 1.76 percent in 2022.

For the fourth quarter of 2023, the bank’s net income surged by 44.3 percent to P13.1 billion from P9.1 billion in the same quarter in 2022 on higher revenue growth and lower provisions recognized.

BPI’s loan book went up by 10.5 percent to P1.9 trillion from P1.7 trillion due to the strong growth across all portfolios, while its deposit base expanded by 9.5 percent to P2.3 trillion from P2.1 trillion as the growth in time deposits tempered the decline in checking and savings accounts.

Its total assets increased by 10.9 percent to reach P2.9 trillion, while total equity stood at P357.2 billion.

BPI ended 2023 with an indicative common equity Tier 1 ratio of 15.3 percent and a capital adequacy ratio of 16.2 percent, both well above regulatory requirements.