This compared with double-digit asset growth in prior years, with actual nine-month asset growth in 2010 averaging 15 percent when the lender’s assets totaled P764 billion.
But BPI president and chief executive officer Aurelio R. Montinola III said the approach was deliberate, having earlier been adopted in light of the sovereign-debt issues hounding the euro-zone countries and the economic problems faced by the United States which is still the country’s largest trading partner.“We have therefore decided to focus on the safety of our assets and the maintenance of our yields at the expense of asset growth. Given a risk-on, risk-off environment, we are communicating more with our customers to provide better-than-foreign-market-investor returns and robust, diversified lending growth to help the economy,” Montinola said in a statement sent by e-mail.
He reported deposits totaling only P625 billion which was a shade under two percent from last year when this totaled P613 billion.
Montinola also reported loan growth averaging 22 percent from last year’s P331 billion, translating to some P404 billion worth of loans in the first nine months this year.
“Loan growth was sustained at 22 percent over last year and remained broad-based across market segments and geographically. The corporate-sector loan growth continued to be strong with the following growth rates: top tier corporations, 24 percent; middle market, 30 percent; SMEs, 20 percent; while the consumer loans growth was modest at 11 percent. The loan-to-deposit ratio thus improved from 56 percent to 66 percent with the peso component now at 75 percent from 64 percent,” he said.
Even though BPI’s loan portfolio kept growing, however, its incidence of soured or non-performing loans remained below industry average at only 2.3 percent for which capital cover equal to 115 percent was provided.
Total revenues were up by 7 percent as net interest income improved by 9 percent, fuelled by a P67 billion growth in average asset base.
Non-interest income was just slightly ahead of the previous year as securities trading gain fell short by P809 million from last year as expected. This was, however, more than compensated for by higher fees and commissions, income from insurance operations, and other operating income.
Operating costs were higher by 13 percent with half of the increase arising from salary adjustments and collective-bargaining agreement related expenses.
Increases were also seen in premises cost, regulatory costs, and other variable expenses. With the bank’s relatively stable asset quality and sufficient loan loss reserve coverage, BPI booked lower year-to-date impairment losses of P1.5 billion.
The bank’s strategy enabled it to maintain its net interest margin and despite the market volatility in the third quarter of the year, to grow its net income by 6 percent to P9.6 billion for the first nine months of the year.
Return on equity was 15.5 percent and return on assets was 1.6 percent.
