BPI earnings grow 21% in 2016

MANILA, Philippines - Earnings of Ayala-led Bank of the Philippine Islands grew 20.9 percent last year on the back of the robust performance of its core businesses amid volatile market conditions.

BPI president and CEO Cezar Consing said the bank took advantage of market opportunities to grow its net income to P22.05 billion last year from P18.23 billion in 2015.

“We took advantage of 2016’s market conditions to exploit unique opportunities for growth in 2017 and beyond,” he said.

BPI said total revenues went up 12.1 percent to P66.55 billion last year from P59.36 billion in 2015.

The bank’s net interest income rose 9.7 percent to P42.38 billion from P38.64 billion. Its non-interest income jumped 16.7 percent to P24.17 billion from P20.72 billion amid strong gains related to its securities portfolio as well as higher fees from core transactional and bancassurance businesses.

Total securities increased 4.1 percent to P307.39 with held-to-maturity (HTM) accounting for the largest position at P268.48 billion, reflecting low sensitivity of the bank’s earnings and capital to interest rate swings.

BPI said its operating expenses increased 9.6 percent to P34.94 billion from P31.87 billion, driven mainly by spending on general infrastructure and collective bargaining costs. Provisions surged 20.7 percent to P4.8 billion.

This translated to a lower cost-to-income ratio of 52.5 percent last year from 53.7 percent in 2015.

BPI’s return on assets (ROA) increased 0.09 percentage points to 1.4 percent while its return on equity (ROE) climbed 1.44 percentage points to 13.8 percent last year.

The bank’s loan book jumped 19.2 percent to P1.04 trillion last year from P872.86 billion in 2015 with the corporate segment accounting for 79 percent while the retail ended the year with a share of 21 percent.

Despite the rise in the loan portfolio, BPI’s 90-day non-performing loans slipped to 1.5 percent form 1.6 percent while its reserve cover increase to 118.7 percent from 110.2 percent.

On the other hand, BPI’s deposit base rose 12.2 percent to P1.43 trillion from P1.28 trillion.

Consing said the growth last year was buoyed by the bank’s strong relationships with corporate clients who drove loan growth across a variety of landmark transactions.

BPI arranged a P12.5-billion Climate Bond for AboitizPower’s Tiwi-Makban geothermal plant, the P15-billion retail bond issuance for property giant Ayala Land Inc. and the P19.2-billion initial public offering of Pilipinas Shell.

“We led some critical financing transactions for corporate clients, spurring our country’s development in energy and infrastructure. In retail, we have positioned our teams for both stronger volumes and more focused risk management,” Consing said.

Last year, the Bangko Sentral ng Pilipinas (BSP) gave BPI the green light to open a total of 44 new branches for both BPI and BPI Family Savings Bank. It also consolidated its ownership over BanKo to enhance its focus on micro-entrepreneurs and promote inclusive growth.