PHILIPPINE banks posted a combined net profit of P208.39 billion as of end-June, supported by strong interest earnings despite losses from trading activities amid volatile financial markets.
Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the banking system's net income reached P208.39 billion during the first six months of the year, nearly double the P104.82 billion recorded in the first quarter.
The figures reflect the cumulative earnings of universal and commercial banks, thrift banks, rural and cooperative banks and digital banks operating in the country.
The earnings were driven primarily by continued growth in interest-based business. Total interest income climbed to P870.73 billion while interest expenses amounted to P230.73 billion, resulting in net interest income of P638.95 billion.
Net interest income continued to account for the bulk of revenues as elevated lending rates allowed financial institutions to earn more from loans and investments, even as funding costs also increased.
Overall operating income reached P761.14 billion, consisting of P638.95 billion in net interest income and P122.19 billion in non-interest income.
Fees and commissions remained the largest contributor to non-interest income, generating P95.68 billion during the period. Other income totaled P23.63 billion while realized gains from the sale or redemption of financial instruments reached P7.95 billion.
Treasury operations, however, weighed on banks' overall performance, with trading income swinging to a P5.67-billion loss as of end-June.
Banks also booked P5.12 billion in unrealized mark-to-market losses and P8.50 billion in realized foreign exchange transaction losses, reflecting continued volatility in financial and currency markets.
Despite the losses, the core lending business remained strong enough to offset the weaker trading results.
On the expense side, non-interest expenses rose to P422.07 billion. Personnel expenses accounted for the largest share at P137.23 billion, followed by administrative expenses that totaled P160.59 billion.
Banks also spent P54.65 billion on taxes and licenses, P32.01 billion on fees and commissions and P30.06 billion on depreciation and amortization.
Loan-loss provisions, meanwhile, reached P111.33 billion as of end-June while recoveries from charged-off assets totaled P14.06 billion, resulting in net losses and recoveries on financial assets of P101.70 billion.
Not counting P47.50 billion in income tax expenses, the banking industry's total profit reached P255.89 billion during the first half, up from P128.54 billion in the previous quarter.
