Bank of the Philippine Islands, the third-largest lender in terms of assets, said Thursday net income declined 5 percent in the first quarter to P6.39 billion from P6.72 billion a year ago on higher provisions for loan losses amid the coronavirus disease 2019 pandemic.
BPI said in a disclosure to the stock exchange it booked P4.23 billion in provisions for loan losses in the first quarter as the COVID-19 pandemic ushered in a difficult period for consumers and businesses that could lead to potentially higher non-performing loans.
“This provision is 2.4 times more than the P1.80 billion set aside during the same period in 2019. This resulted in a net income of P6.39 billion for first quarter 2020, a decline of 5 percent from P6.72 billion registered in the same period last year,” it said.
The bank said total revenues increased by 10.9 percent in the first quarter to P25.26 billion while net interest income grew by 13 percent to P18.14 billion.
Net interest margin was 3.63 percent, up by 24 basis points from 3.39 percent in the first quarter of 2019 as lower asset yields were offset by lower cost of funds. Non-interest income increased 5.8 percent to P7.12 billion on higher securities trading gains.
Operating expenses in the first quarter went up by 3.8 percent to P12.53 billion. Cost-to-income ratio eased to 49.6 percent from 53 percent a year earlier.
BPI said total loans rose 7.3 percent to P1.45 trillion, with growth recorded in microfinance, small and medium enterprises, consumer and corporate loan segments at 66.6 percent, 14.2 percent, 9.5 percent, and 6.7 percent, respectively.
Total deposits increased 4.3 percent to P1.68 trillion. The bank’s current and savings account ratio settled at 73.5 percent, while the loan-to-deposit ratio was 86.3 percent.
The bank’s indicative NPL coverage ratio increased to 109.02 percent in March compared to 92.55 percent as of March 2019. NPL ratio stood at 1.82 percent as of the end of the first quarter 2020.
BPI’s total assets climbed 5.1 percent to reached P2.19 trillion as of end-March. Total securities position was at P338.13 billion, of which 73.5 percent was in hold-to-collect, therefore less sensitive to market risk.
Total equity amounted to P272.70 billion, with an indicative common equity Tier 1 ratio of 15.19 percent and a capital adequacy ratio of 16.08 percent, both above regulatory requirements.
Return on equity was 9.38 percent, while return on assets was 1.21 percent.