BPI sets record 9Mn and 3Q 2023 net income

MAKATI CITY, Philippines --- Bank of the Philippine Islands hit a historical high for nine-month net income, ending the period with earnings of Php 38.6 Bn, up 26.4% vs the prior year, delivering a Return on Equity of 15.6%. Sustained loan and margin growth, as well as tempered provisions, were the main drivers of the strong financial performance.

Total revenues ramped up 15.3% to Php 100.9 Bn year-to-date, attributable to the 24.5% increase in net interest income to Php 76.8 Bn, as average asset base expanded 8.1% and net interest margin widened 54 basis points to 4.07%. This was partly offset by the 6.6% decline in non-interest income to Php 24.1 Bn 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 Php 3.3 Bn or 15.7%, on higher fees from credit cards, bancassurance, various service charges, and trading gains.

Operating expenses for the nine-month period increased 21.3% to Php 48.6 Bn, due to larger spending for manpower, technology, and marketing, resulting in a Cost-to-Income ratio of 48.2%.

Asset quality slightly weakened from last year and the previous quarter, with NPL Ratio of 1.97%. Meanwhile, coverage remains adequate, with a 158.95% NPL Coverage Ratio. Year-to-date, the Bank booked provisions of Php 3.0 Bn, 60.0% lower than the Php 7.5 Bn recognized over the same period last year.

For the third quarter of the year, the Bank recorded net income of Php 13.5 Bn, soaring 33.3% year-on-year, also the highest quarterly net income achieved in the past decade, boosted by the 18.3% jump in revenues to Php 35.3 Bn, on the back of higher net interest income and non-interest income.

Total assets rose 7.2% to Php 2.7 Tn year-on-year, with Return on Assets at 1.95%. Total loans of Php 1.7 Tn was 8.8% higher year-on-year, driven by the loan growth in the corporate, credit card, and auto portfolios of 5.3%, 37.7%, and 22.3%, respectively. Total deposits of Php 2.2 Tn also climbed 6.7% year-on-year, bringing the Loan-to-Deposit Ratio to 80.2%. Total equity stood at Php 349.6 Bn, with an indicative Common Equity Tier 1 Ratio of 16.1% and a Capital Adequacy Ratio of 17.0%, both well above regulatory requirements.

As of September 30, 2023, all three major international Credit Rating Agencies have reaffirmed the Bank’s Credit Ratings: S&P at BBB+ (same as the Philippine Sovereign), Moody’s at Baa2, and Fitch at BBB-. All three also have a Stable Outlook for the Bank.