Bank of the Philippine Islands, the third-largest lender in terms of assets, said Thursday it posted a 22.1-percent drop in net income in the first nine months to P17.17 billion from P22.03 billion in the same period last year, on higher provisions for loan losses in anticipation of increased non-performing loans amid the health crisis.
BPI said in a statement it booked P21.06 billion in provisions for loan losses in the first nine months, or 4.6 times more than the P4.58 billion it set aside a year earlier.
The bank said net income in the third quarter declined 33.7 percent to P5.50 billion from P8.29 billion in the same quarter last year.
Revenues in the nine-month period went up by 9.7 percent to P77.88 billion, as net interest income grew 11.8 percent to P54.40 billion, on the back of a 5.7-percent expansion in average asset base supported by an 18-basis point widening in net interest margin to 3.51 percent.
Non-interest income reached P23.48 billion, up by 5.1 percent from 2019 level, primarily from robust securities trading gains.
Operating expenses as of Sept. 30 reached P36.48 billion, down by 1.6 percent from the previous year on lower premises, technology and various discretionary costs such as marketing, advertising and management and professional fees.
Cost-to-income ratio fell to 46.8 percent from 52.2 percent recorded in the prior year.
BPI said total loans reached P1.38 trillion as of Sept. 30, up by 0.9 percent year-on-year, with growth led by the mortgage and corporate loan segments at 8.7 percent and 2.6 percent, respectively.
Total deposits increased 4 percent to P1.68 trillion from a year ago, boosted by CASA (current and savings accounts) deposits which grew by 14.7 percent. The bank’s CASA ratio was 76.2 percent, while the loan-to-deposit ratio was 82.1 percent.
The bank’s third quarter NPL ratio was 2.98 percent, with NPL coverage ratio at 100.4 percent.
BPI’s total assets reached P2.20 trillion as of Sept. 30, 3.6 percent higher year-on-year. Total equity amounted to P283.44 billion, with an indicative common equity tier 1 ratio of 15.46 percent and a capital adequacy ratio of 16.35 percent, both above regulatory requirements.
Return on equity was 8.32 percent, while return on assets was 1.05 percent.
BPI raised P21.5 billion in August for its pioneering COVID Action Response, or CARE bonds, to finance and refinance eligible micro, small and medium enterprises, one of the sectors hardest hit by COVID-19.
BPI exceeded initial targets for the CARE bonds, as subscriptions for the offering reached more than seven times the initial planned issue size of P3 billion. The CARE bonds have a tenor of 1.75 years and an interest rate of 3.05 percent per annum.