BPI Posts Net Income of P11.03 billion in First Semester 2018

MAKATI CITY, Philippines ---- The Bank of the Philippine Islands (BPI) posted P11.03 billion in net income for the first half of 2018, 5.7% lower versus the same period last year.

Total Revenues of P37.22 billion were driven by strong net interest income of P26.21 billion in the first half of 2018, up by 11.5% on account of a 9.3 % increase in average asset base and net interest margin (NIM) expansion of 8 basis points. Interest income from loans grew by 21.1% year-onyear driven by a 16 basis points improvement in loan yields. However, cost of funds increased by 17 basis points for the period partly due to the higher documentary stamp tax (DST) on deposits.

On a quarter-on-quarter basis, NIM expanded by 15 bps as a result of favorable loan repricing and liquidity provided by the proceeds from the Bank’s recent Stock Rights Offering which allowed for the paydown of more expensive time deposits. NIM increased from 2.91% in Q1 to 3.06% in Q2.

Total loans stood at P1.22 trillion, higher by 15.7% year-on-year driven primarily by strong growth in corporate loans and credit cards at 17.1% and 22.7%, respectively. Total deposits reachedP1.53 trillion, up by 7.2%, with current and savings accounts (CASA) registering faster growth at 10.0%. The

Bank’s CASA ratio stood at 75.3% while the loan-to-deposit ratio (LDR) was at 79.7%.

Lower income from securities trading, trust and investment management and assets sales contributed to a 6.9% year-on-year decline in total non-interest income from P 11.82 billion in the first semester 2017 to P11.01 billion in the first semester 2018. The Bank registered higher revenues from credit card fees and rental income.

Provision for loan losses for the first semester 2018 amounted to P1.91 billion, 22.2% lower than 2017’s first half. The lower provisioning level is based on the Bank’s Expected Credit Loss models under PFRS9 which showed relatively benign increases in potential impairment losses.

Based on BSP Circular 941, the NPL ratio increased slightly from 1.72% last March to 1.80% with a reserve cover ratio of 97.1% at the end of the first semester 2018.

Operating expenses which totalled P21.22 billion was higher by 16.3% year-on-year on accelerated spending on manpower, premises and technology. This is to support the Bank’s continued implementation of its digitalization strategy and its commitment to serve the self-employed micro-entrepreneurs by expanding the network of BPI Direct BanKo branches. Cost-toincome ratio was at 57.0% in the first semester of 2018, up from 51.6% the previous year. PR