Big banks’ profits up 9% to P116 B in 9 months

Earnings of big banks rose by 9.2 percent to P116.1 billion in the first nine months from a year-ago level of P106.26 billion as higher interest income from the increase and benchmark rates offset losses from foreign exchange transactions.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the operating income of universal and commercial banks recorded a double-digit increase of 15.9 percent to P412.65 billion from P356 billion as net interest income surged 22.4 percent to P425.38 billion from P347.47 billion.

The central bank’s Monetary Board has raised interest rates by 150 basis points in four consecutive rate-setting meetings since May to curb rising inflationary pressures as the consumer price index averaged 5.1 percent in the first 10 months, exceeding the BSP’s two to four percent target.

On the other hand, non-interest income of big banks went up by nearly 16 percent to P98.47 billion from January to September compared to P85.14 billion in the same period last year due to higher earnings from trading as well as fees and commissions.

The industry’s earnings from fees and commission rose by 10.3 percent to P57.23 billion from P51.86 billion, while trading income jumped 28.4 percent to P29.75 billion from P23.16 billion.

Banks incurred P3.66 billion in losses from the sale or redemption of securities, lower than the P12.63 billion recorded last year, due to the volatile equities and financial markets.

Likewise, big banks recorded P911.44 million in losses from foreign exchange transactions from January to September, a huge reversal of the P22.56 billion gains recorded in the same period last year.

The BSP has allowed the moderate and gradual weakening of the peso against the dollar due to the strong demand for the greenback to finance the country’s expanding economy.