BPI's First-Half Earnings Up 23%

Bank of the Philippine Islands capped its first half of 2023 with a 23 percent growth in net income to P25.1 billion from the P20.4 billion earned in the same period last year for a Return on Equity of 15.5 percent.

Photo Insert: For the second quarter of the year, BPI booked a quarterly net income of P13.0 billion, up 4.5 percent year-on-year, even without the benefit of a one-time gain.

In a disclosure to the Philippine Stock Exchange, the bank said the drivers of its strong financial performance were average asset base expansion, margin growth, and lower provisions.

Total revenues for the first semester of the year improved up 13.8% to P65.6 billion in the first semester of 2023 from P57.6 billion in the first half of last year.

This came on the back of the 27.4 percent increase in net interest income to P50.1 billion, attributable to an average asset base expansion of 9.2 percent and net interest margin widening by 56 basis points to 4.03 percent.

However, this was tempered by the 15.4% decline in non-interest income to P15.5 billion due to the property sale gain recognized in the prior year.

Removing the impact of this one-off transaction, non-interest income would be higher by P2.2 billion or 16.3 percent, led by the increase in fees from credit cards, various service charges, and securities trading.

Operating expenses for the first six months of the year jumped 21.4% to P31.4 billion, primarily from the growth in spending for structural and one-time salary increases, continued investments in digitalization programs, and various marketing campaigns, rewards, and other selling expenses.

Asset quality remains robust with a non-performing loan (NPL) Ratio of 1.88 percent and an NPL Coverage Ratio of 167.44 percent as of June 30, 2023. The Bank recognized provisions of P2.0 billion year-to-date, 60.0 percent below the P5.0 billion recorded over the same period last year.

For the second quarter of the year, the bank booked a quarterly net income of P13.0 billion, up 4.5 percent year-on-year, even without the benefit of a one-time gain.

Total revenues reached P33.9 billion for the quarter, up 4.9 percent, owing to the decline in non-interest income offsetting the increase in net interest income.

Without the effect of the prior year's gain from property sales, quarterly net income would be higher by 49.3 percent from the same quarter last year. Total assets of P2.7 trillion are higher by 8.9 percent compared to the first half of 2022, with Return on Assets at 1.92 percent.

Total loans for the first semester climbed 10.5 percent to P1.7 trillion, boosted by the loan growth in the corporate, credit card, and auto portfolios of 8.0 percent, 42.7 percent, and 20.4 percent, respectively.

Total deposits also grew 7.6 percent year-on-year to P2.1 trillion. The Bank’s (current accounts and savings accounts) CASA Ratio was 70.2 percent, while the Loan-to-Deposit Ratio was 80.2 percent.

Total equity was P336.1 billion, with an indicative Common Equity Tier 1 Ratio of 15.5 percent and a Capital Adequacy Ratio of 16.4 percent, both well above regulatory requirements.

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