Bank of the Philippine Islands, the fourth-largest lender in terms of assets, said Wednesday net income rose 3 percent in 2018 to P23.08 billion from the previous year, buoyed by the strength of core banking businesses.
The bank said it booked a net profit of P6.07 billion in the fourth quarter of 2018, up 13 percent from P5.37 billion in the same period in 2017. Revenues grew 20.4 percent, as net interest income rose 19.4 percent and non-interest income expanded 22.6 percent.
Comprehensive income for the whole year reached P21.88 billion. Total revenues increased 10.6 percent to P78.52 billion, driven by the 16.2-percent growth in net interest income to P55.84 billion.
“The increase in net interest income was a result of a 9-percent increase in average asset base and a 21-basis-point expansion in net interest margin. The yield on interest-earning assets improved by 49 basis points, partially offset by a 34-basis-point increase in the cost of funds, owing to higher documentary stamp taxes, higher time deposit rates and an increase in other borrowings,” BPI said in a disclosure to the stock exchange.
Total loans grew 12.7 percent to P1.35 trillion, boosted by the strong growth in corporate loans and credit card loans at 13.3 percent and 23.8 percent, respectively.
Total deposits went up 1.5 percent to P1.59 trillion, with current and savings accounts growing 2.4 percent. The bank’s casa ratio stood at 71.9 percent, while the loan-to-deposit ratio was 85.4 percent.
The bank registered a higher fee income from transaction-based service charges, credit card, and rental businesses. Lower trust and investment management fees, corporate finance fees and securities trading income tempered the overall non-interest income results, ending at P22.68 billion.
“The capital that we raised in 2018 allowed us to invest in our ongoing digitalization program, and in our high-yielding SME, consumer and microfinance businesses,” said BPI president and chief executive Cezar Consing.
“The returns from these investments will become apparent in the coming years. We’re quite excited by what 2019 offers,” Consing said.
Operating expenses totaled P43.60 billion in 2018, up 13.2 percent year-on-year, across all major categories of manpower, premises, technology, and other operating expenses. Cost-to-income ratio was 55.5 percent, up from 54.3 percent in 2017, reflecting the impact of the bank’s continued investments in digitalization and the microfinance network.
BPI Direct BanKo, BPI’s microfinance arm, doubled its branch count to 200 as of end-2018. Provision for losses of P4.92 billion was 29.7 percent higher year-on-year. NPL ratio was 1.85 percent. The bank’s total loss coverage, including allowances for contingent liabilities, stood at 91.3 percent.