BPI income up 33% in 2009

MANILA, Philippines - The Bank of the Philippine Islands (BPI) has recorded an unaudited net income growth of 32.8 percent in 2009, or from P6.4 billion in 2008 to P8.5 billion. However, it remained lower than the unprecedented P10 billion income recorded in 2007.

Total resources nonetheless expanded to P725 billion, nine percent higher than the P667.4 billion achieved in 2008.

BPI president and chief executive officer Aurelio R. Montinola III said that despite the gloom and doom at the beginning of the year, BPI managed solid growth and earnings in almost all sectors in 2009.

“While there continue to be differing views on the strength of the recovery in 2010, we are confident that BPI will continue to serve its clients in a proactive financial advisory manner and be an innovative financial trailblazer in this new decade. With the global economic recovery under way, we expect BPI to even perform better in 2010,” Montinola said.

Return on equity (ROE) improved by 13 percent while return on assets (ROA) by another 1.3 percent.

Deposits outperformed loans as the market remained cautious last year.

Overall net loans grew by a mere two percent due to multinationals paying down their loans by 22 percent. “Clearly, multinational and top tier domestic lending were challenged by high liquidity and availability of funding through the capital markets,” the bank chief executive reported.

However, credit cards receivables grew 16 percent, loans to small and medium enterprises expanded by 11 percent, consumer loans managed double digit growth of 10 percent and local middle market names by nine percent.

Deposits expanded by seven percent to P579 billion and assets under management (AUM) increased by a hefty 50 percent to P439 billion. Low cost deposits swelled by 20 percent.

Thus, BPI’s trust department increased its portfolio by 22 percent to P1 trillion.

Total remittances grew 15 percent, as against projections of an industry growth of just five percent. BPI continued to corner over 20 percent of the overseas Filipino remittance business.

Total revenues improved by 15 percent with increments contributed by both net interest and non-interest income. Net interest income was ahead by 10 percent on account of the nine percent expansion in average asset base and a slight improvement in net spreads.

Non-interest income meanwhile recorded a more impressive 25-percent growth largely on account of securities trading gain of P1.5 billion as against losses the previous year. Other income also exhibited positive gains from income from asset sales, rental income, income from insurance operations, and various fees and commissions.

BPI set aside P2.5 billion in impairment losses, P605-million higher than a year ago. The net 30-day non-performing loan (NPL) ratio required by the Bangko Sentral ng Pilipinas (BSP) fell to 2.8 percent and reserve cover further improved to 87.3 percent.

Operating expenses were seven percent ahead of previous year due to manpower and premises- related expenses. Income taxes was P463 million higher than the previous year in view of the higher level of write-offs of deferred income tax on net operating loss carry-over (NOLCO).

Notable gains in 2009 was the acquisition by the Philippine American Life and General Insurance Co. (Philamlife) of Ayala Life Assurance Co. (Ayala Life) to form a bancassurance alliance with BPI.

It likewise formed the first branchless thrift bank called BPI Globe Savings Bank (BanKO), a mobile microfinance-oriented bank. It is a joint venture institution between with Ayala Corp, Globe Telecommunications and BPI.