Banks’ profits grow 28.8% to ₱169.5 billion in Q3

The Philippine banking system reported combined net profits of ₱169.46 billion as of end-September this year, up 28.8 percent year-on-year from ₱131.53 billion, data from the Bangko Sentral ng Pilipinas (BSP) show.

Big banks’ net profits accounted for a large portion of cumulative results at ₱155.76 billion as of the end of the third quarter, 34.19 percent higher compared to ₱116.07 billion same time in 2018.

The industry posted a net interest income of ₱436.76 billion during the period, up 15.93 percent from ₱376.75 billion last year. Non-interest income increased by 25 percent to ₱141.48 billion from ₱113.18 billion.

The universal and commercial banks’ net interest income in the first nine months went up by 21 percent to ₱380.20 billion from ₱314.18 billion. Non-interest income rose 30.65 percent to ₱128.65 billion from ₱98.47 billion same time in 2018.

In a November report of the Philippine Financial System for the first semester of 2019, the BSP reiterated the “sustained soundness and stability of the banking industry in line with domestic economic expansion and positive outlook of the industry players.”

“The positive performance of the banking system was evinced by sustained growth in assets, loans, deposits and capital that was evident across banking groups,” said the BSP in a statement.

Big banks in the first half of the year increased their loans and investments portfolios while thrift banks and the smaller rural banks also funnelled funds to agriculture loans.

According to the BSP, the financial soundness indicators or FSI that they use affirmed that the banking system is stable and resilient despite global uncertainties.

“Capital, mainly comprised of common equity and retained earnings, remained well-above domestic and global benchmarks. Credit quality was satisfactory amid double-digit loan growth,” said the BSP. “Profits generated from core income were also robust (while) banks’ liquidity was sufficient to facilitate short-term conversion of assets while adequately providing for the medium- and long-term financing needs of the growing economy.”

In the meantime, it added that the central bank’s “proactive engagement” with banks will help it to improve or to better monitor and conduct surveillance activities to “mitigate the consequent risks from banks’ operating environment.”

“Overall, the Philippine financial system continued to exhibit sustained resilience against external vulnerabilities,” said the BSP.