Net income for the second quarter was P3.6 billion, 8% higher than a year ago due to the 9.4% increase in net interest income but tempered by the higher tax line. Both non interest income and operating expenses were relatively flat against the same quarter last year.
For the first semester, the significant growth in profits was mainly driven by the 24% improvement in revenues. Net interest income rose by 9% while non-interest income surged by 51%.
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.
Operating expense growth slowed down to 9% with increases registered across all categories of expenses. Impairment loss and income taxes remained to be ahead of the previous year by P438 million and P159 million, respectively.
Loan growth from all segments was sustained as net loan portfolio reached P480 billion, 17% higher than a year ago. Both the middle market and SME segments contributed a 19% growth while the top corporate segment went up by 15%. Consumer lending increased by 17%. Despite the double-digit growth in portfolio, asset quality continued to improve with net 30-day NPL ratio at 1.4% from last year’s 1.8%. Reserve cover was 140.8%.
Total intermediated funds amounted to P1.46 trillion as the Bank’s total deposits stood at P734 billion with growth coming largely from low cost deposits. Assets under management was P730 billion, a 15% growth from last year.
BPI’s market capitalization was P265 billion at end of June and remains the largest among domestic banks. Its Basel 2 Capital Adequacy Ratio (CAR) was 14.5%.
Mr. Gil A. Buenaventura, Senior Executive Vice President and Chief Operating Officer of BPI commented, "We are happy to see that loan growth has rem ained 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.”
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