Bank of the Philippine Islands, the fourth largest bank in terms of assets, said Thursday net income in the first half declined 7.7 percent to P11.7 billion from a year ago, on lower trading gains.
“Comprehensive income was P11.8 billion, down 15.6 percent. Excluding one-off income from sale of HTM [held-to-maturity] securities in June 2016, net income is up 48 percent,” the bank said in a disclosure to the stock exchange.
Book value of equity after the declaration of P3.5 billion in dividends in June 2017 was P173.5 billion, an increase of 7.9 percent from the same period last year.
Total revenues were flat at P35.3 billion, but net interest income increased 13.6 percent to P23.5 billion, supported by a wider average net interest margin and a higher loan-to-deposit ratio.
“Non-interest income dropped 18.4 percent to P11.8 billion, attributable to lower securities trading gains,” it said.
The bank sold a portion of HTM securities in June 2016 to fund loan growth, reduce high cost deposits and enhance capital. It said the absence of one-off trading gains in the first half was partially offset by higher fee-based income, which grew at a robust pace of 17.8 percent, driven by cards and payments, service charges and investment banking.
Operating expenses increased 5.4 percent to P18.3 billion, on increased spending in technology and, to a lesser extent, higher regulatory costs.
Provisions stood at P2.5 billion, as originally budgeted. BPI anticipates continued discipline in managing operating expenses for the remainder of the year.
“The bank’s cost-to-income ratio in the first half stood at 51.6 percent, slightly higher than 49.2 percent for the same period last year. Return on equity was 13.7 percent and return on assets was 1.4 percent, lower by 2.66 and 0.28 percentage points, respectively, and reflecting the absence of one-off trading gains,” it said.
Total loans went up 16.9 percent to P1.1 trillion, driven largely by corporate loans which grew 19.5 percent. Gross 90-day NPLs dropped to 1.5 percent from 1.6 percent; while reserve cover rose to 126.1 percent from 117.8 percent.
Total deposits grew 8 percent to P1.4 trillion while current and savings account ratio was 73 percent.
Securities position at the end of the first semester was P289 billion, up 7.3 percent from same period last year. The bank’s securities portfolio is mostly in held-to-maturity at P260.2 billion, and thus less exposed to interest rate risk.
Total assets expanded 8.3 percent to P1.7 trillion, or P131.4 billion above the first half of 2016 levels.
