BPI income soars 81% to P3.47B in H1

Bank of the Philippine Islands, the second largest bank in the Philippines, said yesterday its net income jumped by 81.1 percent in the first half of 2001 due to significant growth in deposits.

The bank, a unit of Ayala Corp., posted net income of P3.47 billion for the January to June period versus P1.92 billion in the same year-ago period. The result was in line with analysts’ expectations.

For the second quarter alone, net income grew 56.96 percent to P1.34 billion from P851.82 million last year.

"This expansion was fuelled by a P31.0 billion or a combined 10.5 percent growth (from end December) in peso and foreign currency deposits," BPI said in its financial report.

BPI’s total resources expanded by 5.6 percent to P415.5 billion as of June 30 from end-December’s P393.4 billion.

Lenore de la Rosa, a banking analyst at G.K. Goh Securities, said BPI gained from jitters about rival banks last year which drove depositors to BPI.

"They benefited from rumors that hounded major banks last year like PNB and Equitable Bank," De la Rosa said.

Equitable PCI Bank, the country’s third largest bank, was embroiled in allegations against former president Joseph Estrada who was accused of funneling bribe money from gambling syndicates to at least one secret bank account with Equitable.

Merrill Lynch’s Jojo Gonzales said the main reason for BPI’s strong performance was its healthy assets.

"Aside from BPI, I think most Philippine banks will be running a few more quarters of poor results," he said.

On Track to meet target

Analysts expect BPI to meet market forecasts of over P5 billion in net income this year despite the gloomy economic outlook for the second half of 2001.

"The company’s net profit for the first half will already account for 66 percent of our projected full-year figure of P5.3 billion. We believe BPI will be the only bank to report stellar net profit growth for 2001 because of its superior asset quality and capital strength," G.K. Goh’s De la Rosa said.

The Multex Global Estimates sees BPI’s full year net income at P5.029 billion and an earnings per share of P3.30.

In the first half, BPI said all types of deposits registered increases. There were P2.8 billion and P12.9 billion growth in demand and savings deposits from end December which came from additional peso deposits. The P15.3 billion growth in time deposits was driven by foreign currency deposits, it said.

Borrowings and deferred credits and other liabilities declined by P6.1 billion and P7 billion, respectively, compared to end December. Its capital rose in the first half by P2.3 billion to P51.4 billion.

BPI said a cut in operating expenses also propped up the bottom line with a P549 million or nine percent savings relative to last year.

The bank explained it spent the same amount last year for merger-related expenses in manpower and other operating costs.

Loan growth, however, was still below December 2000 level.

"Loans (net of loan loss reserves) of P171.2 billion was still P7.7 billion or 4.3-percent below December level. The bank’s corporate clients remained cautious, keeping borrowings to a minimum," the bank said.