Bank of the Philippine Islands, the third-largest lender in terms of assets, said Thursday net income rose 1.8 percent in the first nine months to P17.5 billion year-on-year, driven by lower provisions.
The bank said in a statement revenues declined 6 percent in the nine-month period to P71.6 billion, while net interest income fell 5.6 percent to P51.2 billion, as net interest margin contracted by 21 basis points from 3.51 percent to 3.31 percent, brought about by lower yields across loan portfolios and treasury assets.
“While non-interest income was down by 7 percent to P20.5 billion on lower trading income, this was cushioned by a 27.2-percent increase in fee income, reflecting the strong recovery across all business lines,” it said.
Total operating expenses as of Sept. 30 reached P36.5 billion, up 3.5 percent led by higher technology cost as the bank continues to invest in digitalization. Cost-to-income ratio stood at 50.95 percent.
The bank booked provisions of P10.3 billion, lower by 49.9 percent than the P20.5 billion it booked over the same period last year. Non-performing loan ratio declined from 2.98 percent to 2.73 percent, with NPL coverage ratio increasing from 100.45 percent to 130.72 percent.
Total loans as of Sept. 30 reached P1.4 trillion, or 0.9 percent higher year-on-year, on increased mortgage, credit card and microfinance loans.
Total deposits went up by 6.6 percent to P1.8 trillion. Notably, current and savings account or CASA grew 12.1 percent, offsetting the 11-percent decrease in time deposits. The bank’s CASA ratio was 80.1 percent, while the loan-to-deposit ratio stood at 77.2 percent.
Total assets hit P2.3 trillion, up 3.3 percent year-on-year. Total equity increased to P291.8 billion, with an indicative Common Equity Tier 1 Ratio of 16.81 percent and a Capital Adequacy Ratio of 17.69 percent, both above regulatory requirements.
Return on equity was 8.3 percent, while return on assets was 1.1 percent.