Combined profits of the country’s largest banks rose 0.9 percent year-on-year in the first nine months, data from Bangko Sentral ng Pilipinas show.
The 36 universal and commercial banks posted a total net income of P87.3 billion as of end-September, slightly up from P86.5 billion a year ago.
Net interest income of the universal and commercial banks increased 8 percent in the nine-month period to P208.578 billion from P193.920 billion a year earlier.
Non-interest income, however, declined 1 percent in the January-September period to P86.282 billion from P87.255 billion in the same period last year.
Currently, there are 36 universal and commercial banks in the whole domestic banking system, 70 thrift banks and 532 rural banks.
Universal and commercial banks accounted for 90 percent of the total resources of the banking system.
Three of the country’s largest banks reported profit growth this year. BDO Unibank Inc., the largest lender, reported a net income of P17.6 billion in the first nine months, up 5.4 percent from P16.7 billion a year ago, on double-digit growth of loans and deposits.
Metropolitan Bank & Trust Company, the second largest bank, said unaudited consolidated net income slightly increased in the nine-month period to P13.3 billion from P13.1 billion.
Bank of the Philippine Islands said net income in the first nine months grew 8.1 percent to P13.8 from P12.8 billion.
Bangko Sentral Governor Amando Tetangco Jr. earlier said the Philippine banking system remained solid, with their balance sheets marked by a sustained growth in assets and deposits.
Global debt watcher Moody’s Investors Service cited Philippine banks, giving them a positive outlook.
Tetangco said despite the strength of domestic banks, they should continue to find ways on how to further solidify their operations amid the threats posed by foreign banks that were taking advantage of the more open banking industry.
Tetangco said the liberalized entry of foreign banks would result in stiffer competition. He said local banks should review their business models to see where they could continue to have comparative advantage.
Bangko Sentral put in place several regulations so that banks could expand, downsize or even consolidate.
Bangko Sentral’s Monetary Board increased the minimum capital requirement for all bank categories in line with efforts to further strengthen the banking system. The minimum capital level of universal and commercial banks will be tiered based on network size as indicated by the number of branches.
The Monetary Board issued the implementing rules and regulations of Republic Act 10641, which allowed the further entry of foreign banks into the country. With the approval of the IRR, additional foreign banks can now apply to operate in the Philippines either as a branch or as a wholly-owned subsidiary. RA 10641 amended RA 7721, which was passed into law in May 1994.
Bangko Sentral approved the applications of six Asian banks to operate in the Philippines this year, including Singapore-based United Overseas Bank Ltd., Taiwan-based Yuanta Commercial Bank Co. Ltd., Industrial Bank of Korea, Shinhan Bank of Korea, the Japan-based Sumitomo Mitsui Banking Corp. and Taiwan-based Cathay United Bank.