Bank of the Philippine Islands, the third-largest lender in terms of assets, is bullish on the 2022 growth prospects amid the sustained strength of core businesses and the reopening of the economy, a top executive said Thursday.
BPI president and chief executive Teodoro Limcaoco, in an online briefing, did not provide the bank’s net income guidance for the year but expressed confidence the growth momentum from 2021 and the first quarter this year could be carried over to the rest of the year.
“The first quarter [numbers] were very strong… and provisioning and loan book were well taken care of. Our net interest margins were strong in the first quarter… These may linger till the end of the year,” Limcaoco said.
BPI executive vice president and chief finance officer Maria Theresa Marcial said the expected higher interest rates environment this year would be good for the bank’s balance sheet.
“We saw an increase in net interest earnings in the first quarter, and this can be sustained for the balance of the year,” Marcial said.
“With the reopening of the economy, we are seeing around 10 to 12 percent growth across loan books, and we see good signs in our asset quality,” Marcial said.
Marcial said any interest rate hike by the Bangko Sentral ng Pilipinas from the record-low of 2 percent would be good for earnings and asset repricing.
Limcaoco said the bank would spend a substantial amount for technology this year—amounting to about P13.5 billion—as digitalization emerges as the trend in the banking industry.
“We spent P9 billion in technology-related items in 2021, and the budgeted spend this year is around 50 percent higher,” Limcaoco said.
BPI posted a net income of P8.0 billion in the first quarter, up 59.6 percent from the same period last year on higher net interest income, lower loss provisions and normalized tax expenses, after last year’s one-time tax adjustments upon effectivity of the Corporate Income Tax and Incentives Reform Act.
Total revenues increased 4.3 percent in the first quarter to P25.4 billion, driven by the jump in net interest income of 12.7 percent to P19.0 billion, on the back of an 11-basis point expansion in net interest margin to 3.42 percent.