BPI net income surges 52% to P9.4B

Posted at 08/01/2012 10:18 AM | Updated as of 08/01/2012 10:21 AM

MANILA, Philippines - The Bank of the Philippine Islands (BPI) saw its net income surge by 52% to P9.4 billion in the first half of 2012, compared to the P6.2 billion a year ago.

BPI attributed the significant growth in profit in the first six months of the year to a 24% improvement in revenues. Net interest income and non-interest income went up by 9% and 51% respectively.

"Improvement in net interest income was due to the combined effect of a P32 billion increase in average asset base and a 14 bps improvement in net spreads. Non-interest income was boosted by the extraordinary level of trading gains realized in the first quarter of the year as the bank sold down its securities inventory," BPI said.

In the second quarter alone, BPI posted a net income of P3.6 billion, 8% up from the previous year. The growth was attributed to an increase in net interest income, but tempered by higher tax line.

BPI said loan growth across various segments were sustained in the first half, with the middle market and SME segments growing by 19% and top corporate segment rising 15%. The net loan portfolio reached P480 billion, 17% higher than the same period last year.

"We are happy to see that loan growth has remained resilient though slightly below the first quarter performance. We expect challenges going forward especially on our net interest margin with the recent cut in the BSP overnight borrowing rate. We will however try to seize opportunities given the continued domestic economic growth, notwithstanding the impact of the eurozone slowdown. At this point in time, we are on track with our target of delivering a sustainable 15% return on equity," said Gil A. Buenaventura, BPI senior executive vice president and chief operating officer.

Asset quality continued to improve with net 30-day non-performing loan ratio at 1.4% from last year’s 1.8%, while reserve cover was 140.8%.

As of end of June, BPI’s market capitalization was P265 billion. Its Basel 2 Capital Adequacy Ratio was 14.5%.