BPI earns 16.72 B in first quarter, up 7.6%

The Ayala-led Bank of the Philippine Islands (BPI) said its net income was up by 7.6% year-on-year in the first quarter to 16.72 billion, and while it’s a modest increase, the bank expects its core earnings to move up higher in the next quarters.

“I think our core earnings will continue the upward trajectory that we have seen in the last several years. Our loss-absorption capacity is excellent, given our earnings and our capital position,” said BPI president and CEO, Cezar P. Consing.

BPI as of end-March had total revenues of 122.78 billion, up by 23.5 percent year-onyear as its net interest income increased by 28.8 percent to

116.05 billion. Non-interest income, in the meantime, rose to 16.73 billion or up by 12.4 percent, while operating expenses went up by 23.8 percent to 112.07 billion.

Bank loans totaled 11.35 trillion at the end of the first quarter, higher by 11.5 percent compared to same time in 2018, on the strength of its corporate, credit card and housing loans during the period. BPI has sufficient funding with total deposits of 11.61 trillion, up 1.3 percent year-on-year and capital of 1257.11 billion.

Consing said the bank’s credit costs will “remain relatively benign” and that he thinks that a “lot of the country’s growth as ‘catch up growth’ so I don’t think you have the excesses that one tends to see in overheated markets.”

Consing further remarked: “Banks are barometers of the economy. If the economy is doing well, we’ll do well. If the national budget gets (implemented) soon, the economy may still be able to grow in the range of 6-7 percent.” Had the budget approval been delayed more, the economy would have a lower growth of 4-5 percent. “That two percent difference could mean a lot in terms of loan growth and credit costs. Of course, inflation and government borrowing will factor into net interest margins. We have to manage the bank in a manner that accounts for both possibilities,” said Consing.

BPI’s common equity Tier 1 ratio stood at 15.68 percent while its bad loans ratio and interest margin was at 1.85 percent and 3.39 percent as of end-March.