December 12, 2017 | MANILA, PHILIPPINES

BPI books double-digit earnings growth

AYALA-LED Bank of the Philippine Islands (BPI) booked a double-digit growth in its bottom line in the first three months of the year on the back of an expansion in its net interest income during the period.

In a disclosure to the local bourse on Thursday, the bank reported that its net income reached P6.25 billion in the first quarter, 25.6% higher from the P4.98 billion recorded in the same period in 2016.

“The main drivers of strong net income for the first quarter are mainly the strong performance in net interest income which grew by almost 15% year on year and this is driven by a strong growth in our average balances for loans driven by strong growth in our corporate loan book this year compared to last year,” BPI Senior Vice-President and Chief Financial Officer Maria Theresa M. Javier told reporters in a media briefing on Thursday after the bank’s annual stockholders’ meeting.

The bank’s net interest income in the January to March period climbed 15% to P11.49 billion from P10 billion the year prior on the back of an increase in asset yields and loan volumes.

BPI’s total loans stood at P1.03 trillion during the period, up 19.9% compared to the P861.22 billion recorded in the previous year. Meanwhile, its gross 90-day non-performing loans (NPLs) slid to 1.5% from 1.7% while reserve cover jumped to 123.7% from 114.2% last year.

The bank’s total deposits also rose to P1.44 trillion in the first quarter, 10.7% higher than the P1.30 trillion booked in the same period in 2016.

“Another main driver of net income is the strong non-interest income growth for the first quarter driven mainly by trading gains from sales, securities, as well as asset sales,” Ms. Javier said.

The bank’s non-interest income came in at P6.46 billion during the period, soaring by 22.6% from the P5.27 billion recorded last year.

Its total revenues also climbed to P17.96 billion at end-March, higher by 17.6% from P15.27 billion in the first quarter of 2016.

BPI’s total assets likewise grew to P1.73 trillion in the first quarter, 12.4% higher from 2016’s P1.54 trillion, the bank reported.

The bank’s operating expenses, however, rose by 11.2% to P8.73 billion in the first three months of 2017 on the back of the additional manpower, spending on operational infrastructure and regulatory costs, compared to the P7.85 billion booked in 2016.

“The bank continues to invest in processes and information systems that enhance customer experience and security. With asset quality strong, provisions were at P1.2 billion, an increase of only 2.4%,” the lender said in its statement.

Its cost-to-income ratio declined to 48.6% during the period compared to the 51.4% in the same period in 2016.

“Our first quarter results are actually quite strong...and what this shows is the momentum that we began to see last year is carried over to this year,” BPI President and Chief Executive Officer Cezar P. Consing told reporters yesterday.

Meanwhile, the bank announced during its stockholders meeting on Thursday that it is looking to put up 90 more BPI Globe BanKO, Inc. (BanKO) branches within the year, bringing its total branch network to 100 by October.

The new offices will be established around BanKO’s 10 current branches.

“We are in the process of building out to a total of 100 branches by October this year for BanKO, and the branches that we’re building out will be a combination of the regular branches and the microfinance banking offices. These are being built...initially around the 10 branches that we have today simply for logistics and coordination reasons,” BPI Family Savings Bank, Inc. President Natividad N. Alejo said during the media briefing.

BPI gained full control of BanKO -- which was established in 2009 as a partnership between BPI, Globe Telecom, Inc. and Ayala Corp. -- after the listed lender bought the shares held by Globe and Ayala in the joint venture.

“So while the 100 branches will be generally around the 10 branch locations we have today, beyond that, we think there’s more opportunity to build more BanKO offices in other parts of the country particularly in the provincial areas,” she added.

BPI also announced yesterday that it will be releasing their Europay, Mastercard and Visa (EMV)-chipped cards by mid-year.

The Ayala-led bank’ earnings hit P22.05 billion in 2016 on the back of trading gains and higher interest income.

BPI shares closed at P105.80 each yesterday, down 20 centavos or 0.19%.