BPI posts record P11.3-B income in 2010

MANILA, Philippines -  Bank of the Philippine Islands (BPI) marked a corporate milestone last year as its net income rose 33 percent to a record P11.3 billion, the bank said in a statement yesterday.

The Ayala-led universal bank, which reported a P10- billion profit in 2007 and P8.5 billion in 2009, said earnings were driven by a 13-percent expansion in total revenues.

Net interest income went up 10 percent as the average asset base expanded by 12 percent. Meanwhile, non-interest income was better by 18 percent due to higher gains from securities trading, fees and commissions, and foreign exchange income, BPI said.

Total resources grew 21 percent to P877 billion while total deposits expanded 24 percent to P720 billion.

Gross loans expanded 16 percent to reach P387 billion, as all market segments sustained double-digit growths. Net 30-day non-performing loan (NPL) ratio further improved to two percent from 2.8 percent, with a reserve cover of 109.2 percent.

BPI president and chief executive officer Aurelio R. Montinola III said in an earlier interview that the bank’s total loans should grow by a minimum 12 percent this year, as the country’s economy remains robust.

“We approach 2011 with a positive outlook for the country, but remain watchful of potentially troublesome global economy contagion effects on the Philippine banking industry,” he added.

Meanwhile, BPI said its operating expenses increased 6.5 percent due to higher premises costs, regulatory and variable expenses. Nonetheless, operating efficiency kept its cost-to-income ratio to 53.8 percent from 57.2 percent in 2009. 

“Impairment losses was P3.4 billion, 36 percent up from last year’s P2.5 billion inclusive of P274 million reserves for the goodwill on the Prudential Bank acquisition,” it said in the report.

At the end of 2010, BPI has a market capitalization of P210 billion, the largest among domestic banks. Last August, BPI raised P10 billion through a stock rights offering. Its Basel II-based capital adequacy ratio (CAR) was at 15.45 percent at yearend, with Tier 1 CAR at 13.86 percent.

Return on equity stood at a profitable of 15.6 percent and return on assets of 1.5 percent, an improvement from 13 percent and 1.3 percent, respectively, in 2009.

BPI has submitted its Internal Capital Adequacy Assessment (ICAAP) document to the Bangko Sentral ng Pilipinas (BSP) after a second dialogue with the BSP on the matter recently.

“We had solid business results, as evidenced by our double-digit business volume growth, our second consecutive 33 percent net income growth and our second Sustainability Report,” Montinola said.

BPI has evolved from a self-declared C-level to a B-level based on the international standards set through the report, which revolves around making BPI more accessible, more convenient, and more cost effective for more Filipinos.

Recently, BPI signed an agreement with ING Bank Manila to acquire the latter’s trust and investment management business in the Philippines. This acquisition, to be completed within the first quarter of this year, will further strengthen BPI’s position in the industry.