The Bank of the Philippine Islands (BPI) ramped up its net income by 25.6 percent in the first three months this year, earning P6.25 billion in profit in the process.
The lender on Thursday also reported total loans of P1.03 trillion, or 19.9 percent higher than last year, as well as total deposits of P1.44 trillion reflecting 10.7-percent growth for the period.
At its annual stockholders meeting at Fairmont in Makati City, BPI also disclosed a 12.4-percent increase, or P191.76 billion more assets compared to the first quarter of 2016.
Thus, total capital grew by 10.2 percent, or P1.73 trillion additional resources. It’s portfolio of soured or nonperforming loans improved by 1.5 percent.
“Because of our balance sheet and track record of profitability, we continue to enjoy high credit ratings of institutions on a par with that of the government,” said Jaime Augusto Zobel de Ayala, chairman of BPI.
The improved figures reflected in the bank’s total revenue of P17.96 billion, or a 17.6-percent growth that its executives attributed to interest and noninterest incomes.
The net-interest income reached P11.49 billion, or 15 percent higher this year, while noninterest income grew further to P6.46 billion, or by 22.6 percent arising from the trading of securities, service charges, underwriting fees and asset sales.
Total securities consisting of assets and debts, posted little growth of only 0.4 percent to P303.02 billion, with held-to-maturity securities of P263.79 billion.
Despite the substantial gains from securities, the BPI executives remain conservative toward the bank’s investment portfolio in guarding stockholders from fluctuations in interest rates.
Throughout the year, BPI will continue to maximize its traditional interest-income sources, such as capital loans to small and medium enterprises through its microfinance unit BanKo that has 10 branches.
BanKo plans to build 90 branches more in the provinces by October, as the BPI plans to expand its client base. From 7.5 million, BPI drew 7.9 million clients of which 460,000 are micro entrepreneurs.
Despite the P9-billion decline in loans for SMEs last year, compared to the P150-billion increase for corporations, BPI assured shareholders of long-term growth through fixed capital resources.
“It’s an indication of our support for the government infrastructure program. We believe the infrastructure programs will ultimately benefit SMEs and we are creating a special bank within a bank because we believe that the country’s future lies with the SMEs,” Ayala said.
The lender vowed to collaborate with SMEs and the Bangko Sentral ng Pilipinas (BSP) in developing more financial products down the line.
“Our SME portfolio is 100 billion but we want them to be bigger and to focus exclusively on SMEs. Obviously, big corporations have different needs from SMEs and we are responding to them,” said Daniel Gabriel M. Montecillo, BPI head of Corporate Clients Segment Group.
BPI is considering these profitability-building measures to integrate SMEs into the Asean community and provide them additional markets, after the association expressed setting qualifications for Asean banks.
“It [Asean] is not yet sure of the application process. So what we can do now is prepare for when the Asean integration happens so we can be designated as a QAB [qualified Asean bank],” BPI President and CEO Cezar P. Consing said.
Asean integration aims to streamline financial and trade services among member-states in building an economically resilient and competitive region that mutually benefits its nations against external crises.
Thus, besides the financial services and stable growth of the BPI, the bank executives showed confidence the country could become a QAB with skilled human resource and effective leadership of the BSP.
“The Philippines has a very competitive labor force and we have a very stable monetary system. We are often compared to Vietnam. Vietnam is a very dynamic country but their dong [currency] is very volatile. So, we got our pluses and our challenges,” Joseph Albert T. Gotuaco, BPI head of Retail Channels and Segments Group, said.