Profits of big, mid-sized banks up in Q1

Earnings of big and mid-sized banks increased despite lower trading and foreign exchange gains caused by the volatile markets in the first quarter.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed profits of universal and commercial banks reached P34.94 billion from January to March, 6.6 percent higher than the P32.77 billion in the same period last year.

The interest income of big banks rose by 12.6 percent to P98.28 billion in the first quarter from P87.26 billion in the same quarter last year, while interest expense went up 13 percent to P22.78 billion from P20.16 billion.

This translated to a 12.5 percent rise in net interest income to P75.44 billion from P67.04 billion while, non-interest fell 10.7 percent to P31.29 billion from P35.05 billion due to lower other income.

Gains on financial assets and liabilities held for trading retreated 8.8 percent to P3.95 billion in the first quarter from P4.33 billion in the same period last year.

Foreign exchange profits of universal and commercial banks plunged 29.5 percent to P1.46 billion from P2.07 billion. Fees and commission income slipped 1.3 percent to P14.17 billion from P14.36 billion.

Non-interest expenses inched up 5.6 percent to P66.4 billion from P62.85 billion.

On the other hand, earnings of thrift banks went up 6.1 percent to P2.96 billion in the first quarter from P2.79 billion in the same quarter last year.

Interest income of mid-sized banks grew 18.8 percent to P17.11 billion from P14.4 billion, while non-interest income remained flat at P3.03 billion from P3.02 billion.

Profits of Philippine banks were steady at P135.34 billion last year P135.57 billion in 2014 amid the intense competition in the country’s banking industry as well as uncertainties brought about by the impending interest rate hike by the US Federal Reserve and the economic slowdown in China.

BSP Governor Amando Tetangco Jr. said in his speech during the Annual Reception for the Banking Community last January the Philippine banking sector was again a source of strength and stability for our economy in 2015.