October 23, 2021 | 00h00
MANILA, Philippines – The Bank of the Philippine Islands (BPI) improved its profits by 1.8% to 17.5 billion pesos in the nine months ending September of this year due to lower provisions for irrecoverable debts.
In a disclosure to the Philippine Stock Exchange, BPI said it halved its allowance for potential loan losses to 10.3 billion pesos in the nine-month period, from a level of 20.5 billion pesos it a year ago, as the country is gradually recovering. the impact of the COVID-19 pandemic.
The 170-year-old bank reported a 5.6% drop in net interest income to 51.2 billion pesos as the net interest margin contracted 21 basis points to 3.31% vs. 3.51%, caused by lower yields on loan portfolios and cash assets.
Likewise, non-interest income also fell by seven percent to 20.5 billion pesos due to lower trading income. This was cushioned by a 27.2% jump in commission income, reflecting the strong recovery across all lines of business.
The Ayala-led bank said total revenue fell six percent to 71.6 billion pesos from January to September of this year.
The bank also reported a 3.5% increase in total operating expenses to 36.5 billion pesos, due to rising technology costs as the bank continues to invest in digitization. The cost / income ratio was 50.95%.
The bank’s loan portfolio grew 0.9 percent to 1.4 trillion pesos due to the rise in mortgages, credit cards and microfinance loans, while its non-performing loan ratio (NPL) improved to 2.73% from 2.98%.
Despite lower provisioning, BPI’s bad debt coverage rate increased to 130.72% at the end of September this year, from 100.45% last year.
The bank said its deposit base increased 6.6% to 1.8 trillion pesos, as the ratio of current accounts and savings accounts rose 12.1% and offset the 11% drop in term deposits.
The country’s fourth-largest lender reported a 3.3% increase in its total resources to 2.3 trillion pesos at the end of September, while total equity rose to 291.8 billion pesos .
BPI reported a Class 1 common stock ratio of 16.81% and a capital adequacy ratio of 17.69%, both well above regulatory requirements.