MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) booked a record net income of P28.8 billion last year, 24.8 percent higher than the P22.42 billion recorded in 2018 on the back of strong interest and non-interest earnings.
BPI president and chief executive officer Cezar Consing said the bank is in a better position now to offer financial services to Filipinos, specifically self employed microentrepreneurs as well as small and medium enterprises which account for a huge part of the Philippine economy.
“Digitalization will further drive our financial inclusion initiatives, while our green financing programs will help us create a more sustainable society,” Consing said.
BPI’s comprehensive income jumped by 28.4 percent to P28.77 billion from P22.41 billion, while operating expenses climbed 14.8 percent to P50.08 billion from P38.53 billion. Its net interest margin increased by 24 basis points to 3.35 percent from 3.11 percent.
The listed bank’s non-interest income went up by 25.2 percent to P28.39 billion, primarily from higher fee-based income and securities trading gains.
Cost-to-income ratio was at 53.1 percent, lower than the 55.5 percent recorded in the prior year. Provision for losses for 2019 was P5.82 billion, increasing the bank’s loss coverage ratio to 104.8 percent.
The bank’s non-performing loans (NPL) ratio improved to 1.66 percent from 1.85 percent in 2018 as the bank’s loan book grew by 8.9 percent to P1.48 trillion, driven primarily by consumer loans that increased by 13.4 percent, while corporate and SME loans went up by 7.9 percent and 5.8 percent, respectively.
BPI’s deposit base increased by 6.9 percent to P1.7 trillion, while the bank’s current account and savings account (CASA) ratio stood at 69.1 percent, while the loan-to-deposit ratio was at 87 percent.
Total assets climbed by 5.7 percent to P2.21 trillion, translating to a return on assets of 1.38 percent. Total equity amounted to P269.58 billion, with an indicative common equity tier 1 (CET 1) ratio of 15.17 percent and capital adequacy ratio of 16.07 percent, both well above regulatory requirements.
Return on equity for 2019 was at 10.97 percent, lower than last year’s 12.8 percent.
For the fourth quarter last year alone, BPI booked a double-digit 11.6 percent growth in net income to P6.77 billion from P4.67 billion in the same quarter in 2018.
BPI has grown to 300 branches the nationwide network of its wholly owned microfinance bank, BPI Direct BanKo with 100 branches opened in 2019 alone.
More than 50 percent of BanKo’s branches and branch-lite units are located in town centers in North and South Luzon, while the rest are distributed throughout various municipalities in Visayas and Mindanao.
Now in its third year of operations, BanKo has more than doubled its loan portfolio every year. From only 2,500 clients in 2016, BanKo has since served over 103,000 self-employed micro-entrepreneurs, providing business loans and financial advice.