The Bank of the Philippine Islands’ (BPI) net income for the first nine months of 2010 amounted to P9.1 billion, 24% better than last year. Return on equity was 17.5% and return on assets was 1.7%. Net interest income grew by 8% due to an 11% increase in average asset base. Non-interest income also increased by 22% on gains from securities trading, fees and commissions, and foreign exchange transactions.
Operating expenses increased by 7% from last year. The bank set aside P2.5 billion in impairment losses, P427 million up from last year’s P2.1 billion. Net 30-day NPL ratio though improved to 2.6% with a reserve cover of 115.9%.
Net income for the third quarter of the year was P3.5 billion, a 25% improvement over the previous quarter’s performance, and 75% better than the P2.0 billion registered in the same period last year.
Revenues reached P10.8 billion, 34% higher than same period last year as both net interest income and non interest income went up. Net interest income was up by 16% due to the 14% expansion in average earning assets while non interest income was up by 70% largely on higher securities trading gain. Booking of impairment losses was accelerated in the third quarter to P1.3 billion, more than twice the level of a year ago.
Total resources went up by 15% to P764 billion on a year on year basis. Deposits at P613 billion were higher by 19%. With assets held in trust at P458 billion, the Bank now manages total funds amounting to nearly P1.1 trillion. Net loans was P331 billion, 13.7% higher as all segments continued to post improvements with the highest growth rates from middle market lending/SMEs (over 16%) and consumer loans (up 16%).
BPI has a market capitalization of P194 billion as of end of September, still the largest among local banks. Its Basel II Capital Adequacy Ratio (CAR) was at 17.0%, while Tier 1 CAR was at 15.3%.
As part of the Bank’s sustainability thrusts and intention to be more relevant to the communities it serves, the Bank recently signed an agreement with World Wide Fund for Nature Philippines (WWF) for a climate risk mitigation project. The project aims to generate city-specific socio-economic baseline data for selected cities outside of NCR, which are most likely to be adversely affected by climate change. Another expected output of the project is a template on risk assessment associated with climate change.
BPI president and CEO Aurelio R. Montinola III, commenting on the Bank’s results said, “We are extremely pleased with the Bank’s performance for the last three quarters. Aided by a favorable economic climate and a low interest environment, our hard work in promoting loan growth and non-interest income opportunities have validated our quality plus growth business model. We are hopeful that both global and local business climate will be equally favorable in the coming year. As always, BPI will be ready and willing to support Philippine economic development.”
