BPI [BPI 142.50, up 1.4%; 85% avgVol] [link] posted a Q3 net income of P17.4 billion, up 29.4% y/y from its Q3/23 net income, and up 13.7% q/q from its Q2/24 net income of P15.3 billion. The Q3 result helped BPI set a 9M net income record of P48.0 billion, up 24.3% from last year, driven by “robust revenue growth” from “strong performance of net interest income” (up 22.2%), average loan expansion (up 18.9%), and increased net interest margin (+22 basis points to 4.29%). BPI also increased its non-interest income by 32.4% due to trading gains of P3.0 billion and fee income of P26.4 billion (up 28% y/y) from service charges, credit card fees, and “bancassurance” income. BPI’s stock is up 32% over the past 12 months, up 37% year-to-date, and is up 68% over the last three years.
MB bottom-line: It has never been more profitable for our country’s banks, and I don’t think that’s an accident. Banks have been raking in cash hand-over-fist from the interest differential that they charge on loans that are already signed at elevated interest rates, but also from the deep menu of fees and service charges that banks pass on to consumers for doing anything within their banking ecosystem. I’m not being critical of BPI specifically--its goal is to make as much money as possible within the confines of the system--but I am starting to question the priorities of the BSP as the banking system’s regulator and the agency in charge of the banking status quo. Remember when a previous BSP Governor said that he’d have to “bribe” the banks with RRR cuts in order to get fee waivers for small value transfers to help ease the burden on low-income Filipinos? Well, the banks sure got their jumbo RRR cut, but where’s the elimination of fees on small value transfers? Don’t get me wrong, I think it’s important that our banking industry is stable. We don’t need bank failures. But when banks don’t even lose money during the largest financial crisis of our lifetimes (COVID) and are hyper-profitable while the majority of the country struggles through the aftermath of COVID and the intense period of inflation, what’s the point of all this banking profit? Again, I do not expect any oligarchs or shareholders to act against their own best interests here by knowingly avoiding income that could be made. It’s the role of the regulator to balance the sliders in a more equitable fashion.
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