Big banks’ earnings slip 9% to P33.74 B

Lower trading income pulled down the earnings of big banks by about nine percent in the first quarter, according to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) yesterday.

The net income of universal and commercial banks amounted to P33.74 billion from January to March, P1.19 billion lower than the P34.94 billion profit booked in the same period last year.

The interest income of big banks registered a double-digit growth of 12 percent to P110.01 billion from P98.28 billion while interest expense inched up 6.7 percent to P24.3 billion from P22.78 billion.

Non-interest income fell 12.4 percent to P27.41 billion in the first quarter from P31.29 billion.

The trading income of major Philippine banks plunged 153 percent to P7.3 billion from January to March this year from P14.17 billion in the same period last year.

Realized gains from sale or redemption of trading securities was almost cut by half to P2.77 billion from P5.2 billion while losses from market-to-market trading position declined 26 percent to P782.9 million from P1.06 billion.

Big banks also posted a gain of P261.15 million from foreign exchange transactions in the first quarter, reversing a net loss of P194.5 million.

The universal and commercial banks also registered a foreign exchange profit of P1.75 billion, 19.8 percent higher than the P1.46 billion booked in the same quarter last year.

The banks also registered lower income from the sale or redemption of non-trading financial assets and liabilities as well as from the sale or derecognition of non-financial assets.

Assets of major banks reached P12.45 trillion as of end-March, 13.3 percent higher compared to P10.99 trillion in end-March last year.

The Asian Banker earlier said Philippine banks would still have the second fastest growing earnings from retail banking amid the complex and constantly evolving operating environment.

The result of the large-scale study of the Asian Banker Research showed Asia Pacific’s retail banking industry would continue to grow, albeit at a slightly slower pace of 10 percent between 2016 and 2020 from 12 percent between 2012 and 2014.

The publication expects the upward trend in the retail banking income from developing markets to continue and reach 73 percent of gross retail banking in the region given the better growth prospects. It accounted for around 67 percent of the gross retail banking income of the region in 2016, increasing gradually from 60 percent in 2012.

The growth of the retail banking income in the Philippines is seen slowing down to about 12 to 13 percent over the next few years from about 17 percent but would still be the second fastest after Vietnam.