BPI to borrow up to $2 billion via note sale

The Bank of the Philippine Islands (BPI) will establish a Medium-Term Note Program amounting to US$2 billion, or its equivalent in other currencies.

In a disclosure to the Philippine Stock Exchange, BPI said the program is part of the bank's initiatives to maximize flexibility in accessing funding expediently.

“The issuance of notes under the Program shall be subject to market conditions and shall be determined by requirements of the Bank’s business,” BPI said.

BPI reported that net income was flat at R6.25 billion for the first quarter of 2018 compared to the same period last year but up by 16.4 percent quarter on quarter.

Total revenues reached R18.45 billion, higher by 2.7 percent versus the first quarter of 2017. Net interest income was R12.51 billion, up by 8.9 percent on account of the expansion in average asset base.

Interest income from loans grew by 18.4 percent year-on-year driven by the improvement in loan yields. Meanwhile, interest expense tempered the growth in net interest income, partly due to higher DST (documentary stamp tax) rates on deposits which increased the cost of funds by 5 basis points.

Net interest margin (NIM) widened by 4 basis points yearon-year.

Total loans stood at R1.21 trillion, a growth rate of 17.2 percent year-on-year driven primarily by corporate loans.

Total deposits reached R1.59 trillion, up by 10.4 percent. The Bank’s current account and savings account ratio (CASA) stood at 71.6 percent while the loan-todeposit ratio (LDR) settled at 76.2 percent.

The Bank’s holdings in securities totaled R309.95 billion, up only 2.3 percent year-on-year. Almost 90 perce t of the securities portfolio was in Hold-to-Collect, and thus less exposed to interest rate risk.

Non-interest income dropped by 8.1 percent to R5.94 billion due to lower income from trust and investment management fees, securities trading and asset sales.

Meanwhile, credit card fees, bank commissions, stock brokerage fees, and foreign exchange trading were higher for the period.

Operating expenses totaled R9.75 billion, up by 11.7 percent, driven mainly by accelerated technology spending. Likewise, manpower costs and premises costs were higher by 9 percent due to increased headcount and the continued build up of microfinance branches. (JAL)