THE Bank of the Philippine Islands (BPI) posted net income of P4.77 billion in the three months ending in September, representing a 28-percent increase over P3.74 billion earned in the same period last year, and a sequential 8-percent improvement of P4.43 billion earned in the second quarter of 2014.
On a year-to-date basis, net income amounted to P12.8 billion, a 19-percent decline from the same period last year, which included extraordinary gains from securities trading. The bank’s return on equity and return on assets for the year are 13.4 percent and 1.4 percent, respectively.
BPI continued to post solid growth in its core lending business. Net loans reached P702 billion, an increase of 28 percent over year-ago levels. Deposits ended the quarter at P1.044 trillion, an increase of 17 percent over year-ago levels.
Furthermore, the bank’s current- account and savings-account ratio as of the third quarter (Q3) of 2014, 76.5 percent, improved as compared to 68.9 percent one year ago and 72.7 percent in the prior quarter. On a year-to-date basis, net interest income grew 15 percent as a result of the bank’s strong loan growth and improving deposit mix.
Noninterest income amounted to P14.8 billion for the year, representing a 17-percent decline compared to year-ago levels. Income in relation to securities and foreign-exchange trading was P2.1 billion, a significant reduction relative to P5.8 billion one year ago. Noninterest income excluding securities and foreign-exchange trading was P12.7 billion, a 7-percent increase from the prior year.
Operating expenses grew by 13 percent, attributable to the bank’s investment in technology and its headcount expansion. In Q3 2014, the bank’s manpower complement was 14,336 as compared to 12,750 at the end Q3 2014, a 12-percent increase. Cost-to-income ratio as of Q3 2014 was 53 percent.
The bank maintained strong asset quality and capitalization ratios. Gross 90-day nonperforming loans stood at 1.8 percent, an improvement as compared to 2.1 percent one year ago. Reserve cover was 107 percent. Equity capital ended Q3 2014 at P138 billion, resulting in a Basel 3 capital adequacy ratio of 15.7 percent and common equity Tier-1, or CET 1, ratio of 14.9 percent.
Cezar P. Consing, president and CEO, said, “We are very pleased with how our client businesses across retail, corporates and financials have stepped up to fill in for proprietary trading. We remain very disciplined about costs. Our headcount will level off at 14,500, a long held target. We are excited about our investments in technology and customer channels, and the enhancements they will bring to the experience of BPI’s customers.”