Bank of the Philippine Islands (BPI) of the Ayala Group is optimistic about its 2024 performance despite the “higher-for-longer-longer” interest-rate environment amid the sustained strong consumers demand and spending.
BPI president and chief executive Jose Teodoro Limcaoco said in a news briefing Tuesday following the company’s annual stockholders meeting that while there are still risks from external factors, “the economy remains in great shape”.
Limcaoco said people would be able to adjust to current high interest rate environment as rates are just back to pre-pandemic levels.
“This does not necessarily mean it will bad for consumers or corporates. They just have to make a mental adjustment in their heads that we are back where it was pre-pandemic,” Limcaoco said.
“It does not mean we are seeing higher defaults. I think the economy is in great shape obviously there are risks from external factors, there are some risks from inflation, maybe coming from fuel and food,” he said.
BPI said its first-quarter net income climbed 25.8 percent to P15.3 billion, driven by higher revenues which more than offset the impact of higher operating expenses and provision for probable loan losses.
BPI said this translated into a return on equity of 15.7 percent and return on asset of 2.02 percent.
Total revenues climbed 24.6 percent in the first quarter to P39.5 billion, led by by a 23.5-percent increase in net interest income to P29.8 billion. It reported an 18.5-percent increase in the average daily balance of loans and a 25-basis-point rise in net interest margin to 4.19 percent.
Non-interest income reached P9.7 billion, up 28.1 percent, boosted by the underlying strength of the bank’s businesses led by insurance, credit cards and wealth management.
Earnings per share in the first quarter reached P2.90, an 18.1-percent increase from last year’s P2.46, reflecting the strong income growth and the increased number of outstanding shares arising from the merger with Robinsons Bank on Jan. 1, 2024.
Total operating expenses in the quarter rose 19.6 percent to P18 billion on higher spending on manpower, technology, marketing campaigns and transaction-related processing fees.
Cost-to-income ratio improved to 45.6 percent owing to robust revenue generation while pre-provision operating profit increased by 29.2 percent.
Total assets grew by 14.7 percent to P3.1 trillion. while gross loans increased 18.7 percent to P2 trillion. Total deposits jumped 12.8 percent to P2.4 trillion, with CASA (current and savings account) ratio was at 64.8 percent and loan-to-deposit ratio at 84 percent.