Bank of the Philippine Islands, the third-largest lender in terms of assets, said Thursday net income in the first three months jumped 52 percent year-on-year to P12.1 billion on the back of asset base expansion, margin growth and lower provisions.
The bank said in a disclosure to the stock exchange the first-quarter profit translated into a return on equity of 15.4 percent.
“Total revenues for the first quarter of the year grew 25.1 percent to P31.7 billion propelled by the 27.2-percent increase in net interest income to P24.2 billion, on the back of a 10-percent expansion in average asset base coupled with a 52-basis point increase in net interest margin to 3.94 percent,” it said.
It said non-interest income climbed by 18.6 percent to P7.6 billion, driven by higher credit card billings and charges, securities trading gains and fees from investment banking project finance deals.
“Total operating expenses for the first quarter was P15.1 billion on spending for manpower structural increases, milestone payments for digitalization initiatives, targeted marketing campaigns and rewards redemptions, and higher transaction-related processing fees,” it said.
Despite the 19.7-percent increase in operating expenses year-on-year, cost-to-income ratio remained lower at 47.5 percent on strong revenue generation.
Asset quality also remained strong as the non-performing loan ratio improved to 1.82 percent from 2.38 percent in March 2022, with a robust NPL coverage ratio of 176.71 percent.
The bank booked provisions of P1.0 billion, down by 60 percent from P2.5 billion it recorded over the same period last year, as asset quality has been on an improving trend.
Total assets reached P2.7 trillion, up 12.4 percent from last year, while return on assets was 1.88 percent.
Total loans as of March 31, 2023 climbed 13.6 percent to P1.7 trillion, coming from higher loan growth in the corporate, credit card and auto portfolios of 12.6 percent, 38.7 percent and 16.4 percent, respectively.
It said total deposits increased 13.6 percent to P2.1 trillion. CASA (current and savings account) ratio stood at 70.3 percent, while the loan-to-deposit ratio was 77.3 percent.
Total equity was P331.6 billion, with an indicative common equity tier 1 ratio of 15.7 percent and a capital adequacy ratio of 16.6 percent, both above regulatory requirements.
BPI was the second universal bank that reported first-quarter performance this year. BDO Unibank Inc., the country’s largest lender, earlier said its profit in the first quarter jumped 41 percent to P16.5 billion from P11.7 billion a year ago on the back of broad-based growth across businesses.
BDO said in a disclosure to the stock exchange return on average common equity improved to 14.45 percent from 11.09 percent in the same period last year.
“While macroeconomic challenges persist with still elevated inflation and interest rates, the bank believes it is in a good position to weather short-term volatility and capitalize on long-term growth opportunities given its sound balance sheet, established business franchise and strong and diversified earnings streams,” it said in a statement.