Bank of the Philippine Islands, the third-largest lender in terms of assets, said Thursday net income fell 15 percent in the first half to P11.68 billion from P13.74 billion a year ago, as the bank allocated higher provisions for loan losses amid the onslaught of the COVID-19 pandemic.
The bank said net profit in the second quarter declined 25 percent to P5.29 billion from P7.01 billion in the same period last year.
“BPI booked P15.01 billion in provisions for loan losses in the first semester of 2020 as the COVID-19 pandemic ushers in a difficult period for consumers and businesses that could lead to potentially higher non-performing loans,” it said.
“This provision is 4.3 times more than the P3.48 billion set aside during the same period in 2019. This resulted in a net income of P11.68 billion for first semester 2020, a decline of 15 percent from P13.74 billion registered in the same period last year,” BPI said in a statement to the stock exchange Thursday.
Revenues increased 14.8 percent in the first half to P52.69 billion as net interest income grew 12.5 percent to P36.40 billion, on the back of a 5.9-percent expansion in average asset base and 18-basis point expansion in net interest margin to 3.55 percent.
Non-interest income climbed 20.3 percent to P16.29 billion on higher securities trading gains. Operating expenses dropped 0.3 percent to P24.19 billion on lower premises, technology, marketing and product expenses.
Cost-to-income ratio was at 45.9 percent, lower than 52.9 percent recorded in the prior year.
Total loans as of June 30 reached P1.43 trillion, up 5.9 percent from a year earlier, with growth recorded in microfinance, corporate and consumer loan segments at 41.4 percent, 8.4 percent, and 2.5 percent, respectively.
Total deposits increased 6.3 percent to P1.76 trillion, driven by CASA deposits which grew by 11.8 percent. The bank’s CASA ratio was 71.8 percent, while the loan-to-deposit ratio was 81.4 percent.
The bank’s NPL ratio stood at 1.83 percent with NPL coverage ratio increased to 140.7 percent in June from 97.5 percent a year ago.
The bank said that as of June 30, total assets reached P2.26 trillion, higher by 5.8 percent year-on-year.