Metro Manila (CNN Philippines, July 22) – The Bank of the Philippine Islands posts higher profits in the second quarter of the year despite the raging COVID-19 health crisis.
In a disclosure to the local exchange on Thursday, the Ayala-led bank reported net income of 6.8 billion yen, up 28.8% from the same quarter last year and 36.3% compared to the first three months of 2021.
The recent figure is BPI’s highest quarterly income since the start of the pandemic, he said, attributing the largest tally to “recognized lower provisions.” The bank’s second-quarter profit brought first-half net profit to 11.8 billion yen, an annual growth of 1.2%.
However, the company saw its total revenue drop 6.7% between January and June to 48.1 billion yen.
One of the country’s largest banks, BPI allocated 6.5 billion yen in loan provisions for the period, down 55.7%. BPI also reported a non-performing loan ratio of 2.94% and a bad debt coverage ratio of 120.3%.
Total loans reached 1.4 trillion yen at the end of June, down 4.5% on “weaker” demand for business, small and medium-sized business and auto loans. Overall, deposits also fell 4.5% to 1.7 trillion yen.
“Net interest income fell 6.6% to 33.9 billion yen as the NIM contracted 24 basis points from 3.56% to 3.32%, yields on assets income falling by 85 basis points, “he said, adding that non-interest income also fell 7.1% to 14.3 billion yen mainly due to lower trading income .
Fees and commissions, meanwhile, jumped 37.2% in the company’s paid businesses.
BPI’s total assets stood at 2.2 trillion yen, a decline of 3%, he added.
“Total equity increased to 285.8 billion pesos, with an indicative Common Equity Tier 1 ratio of 16.95% and a capital adequacy ratio of 17.82%, both above regulatory requirements. Return on equity was 8.4%, while return on assets was 1.1%, “the bank noted.
BPI is among the Philippine banks that received a downgrade of their outlook from “stable” to “negative” from global debt watchdog Fitch Ratings following a similar review of its outlook for the national economy.