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BPI net income climbs

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BANK of the Philippine Islands (BPI) booked slightly higher net earnings in 2017 driven by the growth of its net interest income.

In a disclosure to the Philippine Stock Exchange on Monday, the Ayala-led BPI said it recorded a net income of P22.42 billion last year, up by 1.7% from 2016.

For the fourth quarter alone, BPI’s net income grew 14.9% to P5.37 billion from the P4.67 billion posted in the comparable year-ago period.

BPI’s net interest income climbed 13.4% to P48.04 billion in 2017, driven by growth in its assets and improvement in its net interest margin.

Meanwhile, non-interest income slid 4.9% to P22.98 billion last year in the absence of trading gains. The bank’s lower non-interest income was partially offset by higher fee-based income, which rose 15.6% to P19.9 billion year-on-year. This was driven by higher credit card fees, trust and investment management fees, insurance fees, bank commissions and service charges. This brought BPI’s total revenues to P71.02 billion in 2017, up 6.7%.

Total loans grew 15.5% year-on-year to P1.20 trillion on the back of corporate loans. Despite an increase in lending, BPI’s asset quality improved as its gross 90-day non-performing loans ratio declined to 1.29% from 1.46%. Its reserve cover ratio also increased to 129.2% from 118.7%.

Total deposits, meanwhile, stood at P1.56 trillion, up 9.1%, with the bank’s current account and savings account ratio at 71.2%. Its loan-to-deposit ratio stood at 77%.

The bank’s assets expanded to P1.9 trillion at end-2017, up 10.3%, while total capital grew 9.4% to P180.69 billion, net of P7.09 billion in cash dividends paid.

Capital adequacy ratio and common equity Tier 1 ratio stood at 12.74% and 11.84%, respectively, both down by 0.26 percentage point.

Operating expenses grew 10.3% to P38.53 billion driven by higher expenses on technology, operations and marketing, as well as the growth in assets accompanied by increase in regulatory costs.

BPI’s securities position was stable at P306.12 billion, slipping by 0.41% from 2016. Over 90% of the bank’s securities portfolio was in held-to-maturity assets, and thus less exposed to interest rate risk.

“The bank continues to be a leader in profitability metrics, with cost-to-income ratio of 54.3%, slightly higher compared to 52.5% in 2016, driven mainly by digitalization initiatives,” BPI said in the disclosure.

Return on equity was 12.8% and return on assets was 1.3%, slightly lower by 1.0 and 0.12 percentage points, respectively.

“We come out of 2017 stronger than ever”, BPI President and Chief Executive Officer Cezar P. Consing was quoted as saying in the statement. “While the [bank] has grown significantly in the past several years, we intend to continue to invest in people, technology and branches to support and benefit from a surging Philippine economy. Inclusive, profitable growth will be our focus.”

BPI earlier the creation of its business banking segment which caters on the banking needs of the country’s small and medium enterprises. Operations of the segment commenced at the start of the year.

Meanwhile, BPI raised P12.24 billion from its issuance of long-term negotiable certificates of time deposit, the largest issuance by far in the industry.

BPI shares closed at P121.80 each yesterday, up P1.80 or 1.5% from its previous finish. — KANV