November 21, 2017 | MANILA, PHILIPPINES

BPI profit up 21% to P22 billion

AYALA-LED Bank of the Philippine Islands (BPI) reported double-digit growth in earnings to hit P22.05 billion in 2016, driven by trading gains and higher interest income.

In a statement on Thursday, BPI, the country’s third largest lender in asset terms, said its net income jumped 20.9% to P22.05 billion in 2016 from P18.04 billion earned in 2015.

“We took advantage of 2016’s market conditions to exploit unique opportunities, while gearing for growth in 2017 and beyond,” BPI President and Chief Executive Officer Cezar P. Consing was quoted saying in a statement.

“We led some critical financing transactions for corporate clients, spurring our country’s development in energy and infrastructure. In retail, we have positioned our teams for both stronger volumes and more focused risk management,” he added.

The bank’s comprehensive income posted a double-digit growth to P21.74 billion last year, 30.2% higher from P16.69 billion in 2015.

Total revenues increased 12.1% to P66.55 billion during the year compared to P59.36 billion in 2015. This was driven by a 9.7% growth in net interest income to P42.38 billion, and a 16.7% increase in non-interest income to P24.17 billion “on strong gains related to the Bank’s securities portfolio, and higher fees from core transactional and bancassurance businesses.”

BPI said its total loans surpassed the P1 trillion level, hitting P1.04 trillion in 2016. This was 19.2% higher from 2015’s P872.86 billion, with corporate lending comprising 79% of the total loan portfolio, while 21% are from retail.

Its gross 90-day non-performing loans (NPL) ratio dropped to 1.5% last year, better from the 1.6% seen in 2015. NPLs are soured debts that remained unpaid for at least 30 days after their due date.

“Growth in BPI’s business was buoyed by the bank’s strong relationships with corporate clients who drove loan growth across a variety of landmark transactions,” the listed lender said.

Total deposits rose 12.2% to P1.43 trillion in 2016 from the P1.28 trillion recorded in 2015.

Meanwhile, the lender’s operating expenses increased to P34.94 billion in 2016, 9.6% higher from the P31.87 billion in 2015.

BPI said its earnings translated to a 13.8% return on equity, or the net income earned as a percentage of stockholder investment -- a key measure of performance, higher than 2015’s 12.3%. Its return on assets, meanwhile, or the net income as a percentage of total assets, remained at 1.4% by end-2016.

Its cost-to-income ratio likewise dropped to 52.5% last year from the 53.7% level seen in 2015.

The bank’s net assets grew 13.8% to P1.73 trillion in 2016, from the P1.52 trillion in 2015.

Investment securities closed at P307.39 billion in 2016, up 4.1% from 2015’s P295.18 billion. The bank’s investment securities were mostly held-to-maturity (HTM), reaching P268.48 last year, higher from the previous year’s at P244.81 billion, “reflecting low sensitivity of the Bank’s earnings and capital to interest rate swings.”

Meanwhile, BPI’s capital -- net of all cash dividends declared at yearend -- stood at P65.13 billion, 9.9% higher from 2015’s level at P150.28 billion.

Its total capital adequacy ratio -- a measure of the bank’s financial strength -- declined to 13% by end-2016 from 13.6% in the previous year, but was still above the central bank’s 10% minimum requirement.

BPI’s common equity Tier 1 (CET1) ratio also slipped to 12.1% from 12.7% in 2015, but nonetheless surpassed the minimum CET1 ratio of 8.5%.

By end-2016, the bank added a total of 44 new branches for both its thrift lending arm BPI Family Savings Bank and BPI itself. -- Janine Marie D. Soliman