BANK of the Philippine Islands (BPI) on Thursday reported a slightly lower first-half net income as a sharp increase in loan loss provisions offset double-digit growth in revenues.
The Ayala-led lender said net income dipped by 0.4 percent to P32.8 billion from P33.0 billion a year earlier.
Total revenues rose 12.4 percent to P104.0 billion, driven by a 12.5-percent increase in net interest income and a 12.1-percent rise in non-interest income.
The bank said stronger earnings from its core businesses were tempered by higher operating expenses and provisions for expected credit losses.
Operating expenses climbed 13.8 percent to P48.6 billion on higher personnel, technology and business volume-related costs, while provisions surged 84 percent to P13.3 billion as the bank set aside more reserves amid a weaker macroeconomic outlook.
Despite the higher provisions, BPI’s asset quality remained stable, with its nonperforming loan ratio unchanged from the previous quarter at 2.42 percent, while its nonperforming loan coverage ratio improved to 92.98 percent.
The bank’s loan portfolio expanded 12.4 percent year on year to P2.7 trillion, supported by growth across both corporate and consumer segments.
Lending to institutional clients increased 8.7 percent, while loans to non-institutional borrowers jumped 21.2 percent, led by small and medium enterprises, credit cards and personal loans.
Deposits grew 9.2 percent to P2.8 trillion, while total assets increased 9.6 percent to P3.7 trillion.
BPI said its common equity tier 1 ratio at the end of the first half stood at 14.0 percent and its capital adequacy ratio was at 14.8 percent, both remaining above regulatory requirements.
During the second quarter, the bank permanently waived its InstaPay and PESONet transfer fees for person-to-person interbank transactions across its digital platforms, sparking a trend that saw a number of other commercial banks following suit.
The bank also expanded its agency banking network to more than 7,000 partner stores as of July 1, with more than 1,300 of these outlets offering cash deposit and withdrawal services.
BPI shares on Thursday rose P0.70, or 0.68 percent, to close at P104.20 each amid a 0.36 percent advance for the benchmark Philippine Stock Exchange index.
