Earnings of Philippine banks hit P115 B

MANILA, Philippines - Earnings of Philippine banks posted a double-digit growth in the first nine months despite the volatile global financial markets brought about by an impending rate hike by the US Federal Reserve and the decision of the United Kingdom to leave the European Union.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the net income of banks reached P114.78 billion from January to September, 16.7 percent higher than the P98.37 billion recorded in the same period last year.

The interest income of Philippine banks grew 10.6 percent to P366.72 billion in the same first nine months from P331.58 billion in the same period last year, while interest expense rose 9.7 percent to P83.07 billion from P75.73 billion.

This translated to an 11.4 percent rise in net interest income to P283.3 billion from P255.66 billion, while non-interest income inched up by 3.2 percent to P109.85 billion from P99.33 billion.

The trading income of Philippine banks jumped 21.2 percent to P43.72 billion in the first nine months from P36.08 billion in the same period last year.

Amid the continued weakening of the peso, gains of banks from foreign exchange transactions surged 26 percent to P7.4 billion from P5.87 billion but was wiped out by the 33.8 percent plunge in foreign exchange profit to P4.48 billion from P6.77 billion.

Non-interest expenses grew 10.3 percent to P251.56 billion from P227.99 billion.

The profits of universal and commercial or big banks went up 16.5 percent to P101.72 billion in the first nine months from P87.33 billion in the same period last year while that of thrift or mid-sized banks jumped 24 percent to P10.47 billion from P8.44 billion.

Debt watcher Moody’s Investors Service earlier said the country’s banking sector poses limited contingent risks to the government.

“The Philippine banking system as a whole is well-capitalized, profitable, competently managed and very liquid, thus posing limited contingent risks to the government,” Moody’s said.

The total banking system assets were worth about 91 percent of gross domestic product (GDP) as of end-June. Total loans also accounted for half of the total assets.