MANILA, Philippines — Bank of the Philippine Islands (BPI) saw its net income slip in the first half as a sharp rise in credit-loss provisions and higher operating costs offset double-digit revenue and loan growth.
The Ayala-led bank booked a net income of P32.8 billion from January to June, down by 0.4 percent from P33 billion in the same period last year.
“Strong revenue growth across its key businesses supported earnings amid higher operating expenses and provisions,” BPI said.
Provisions for potential loan losses surged by 84 percent to P13.3 billion as the bank raised its expected credit losses amid what it described as “deteriorating macroeconomic conditions and outlook.”
The higher provisioning came even as BPI’s gross nonperforming loan ratio remained steady from the previous quarter at 2.42 percent. Its NPL coverage ratio, which measures the bank’s ability to absorb potential losses from soured loans, improved to 92.98 percent.
Operating expenses likewise climbed by 13.8 percent to P48.6 billion, reflecting increased spending on manpower and technology as well as costs associated with higher business volumes.
As expenses grew faster than revenues, BPI posted a cost-to-income ratio of 46.8 percent during the six-month period. Still, the bank’s total revenues expanded by 12.4 percent to P104 billion, supported by higher interest earnings and stronger fee-based income.
BPI’s total loan portfolio reached P2.7 trillion as of end-June, up by 12.4 percent from a year earlier, reflecting broad-based growth across its institutional and retail businesses.
Institutional loans increased by 8.7 percent, while non-institutional lending jumped by 21.2 percent. Loans to small and medium enterprises surged by 74.5 percent, credit card receivables rose by 28.9 percent and personal loans expanded by 21.4 percent.
Deposits grew by 9.2 percent to P2.8 trillion, bringing the bank’s loan-to-deposit ratio to 93.6 percent. Total assets stood at P3.7 trillion, 9.6 percent higher than a year ago, while equity rose by 6.4 percent to P482.6 billion.