BANK of the Philippine Islands, the third-largest lender in terms of assets, said net income in the first quarter was unchanged at P6.25 billion from a year ago partly due to lower trading gains.
The bank said in a statement Monday net profit in the first three months was up 16.4 percent compared to a quarter ago.
Total revenues rose 2.7 percent to P18.45 billion on year, while net interest income stood at P12.51 billion, up 8.9 percent due to the expansion in the average asset base.
Interest income from loans increased 18.4 percent year-on-year driven by the improvement in loan yields. Meanwhile, interest expense tempered the growth in net interest income, partly due to higher DST (documentary stamp tax) rates on deposits, which increased the cost of funds by 5 basis points.
Net interest margin widened 4 basis points year-on-year. Total loans stood at P1.21 trillion, up 17.2 percent year-on-year, driven primarily by corporate loans.
Total deposits rose 10.4 percent to P1.59 trillion. The bank’s current account and savings account ratio stood at 71.6 percent while the loan-to-deposit ratio settled at 76.2 percent.
The bank’s holdings in securities totaled P309.95 billion, up 2.3 percent year-on-year. Almost 90 percent of the securities portfolio was in hold-to-collect arrangement, and thus less exposed to interest rate risk.
“Non-interest income dropped by 8.1 percent to P5.94 billion due to lower income from trust and investment management fees, securities trading and asset sales,” it said.
Credit card fees, bank commissions, stock brokerage fees and foreign exchange trading were higher during the period. Operating expenses totaled P9.75 billion, up 11.7 percent, driven mainly by accelerated technology spending.
Manpower costs and premises costs were higher by 9 percent due to increased headcount and the continued build up of micro-finance branches.
The bank in January adopted the expected credit loss models required under the Philippine Financial Reporting Standards (PFRS 9) as the basis for the provisioning of loan losses. Provision for loan losses in the first quarter 2018 amounted to P785 million, down 35.1 percent from the first quarter of 2017.