The Ayala group’s banking unit, Bank of the Philippine Islands (BPI), reported a net income of P9.4 billion for the first half which was a 52 percent growth compared with the same period last year.
Net income for the second quarter was P3.6 billion which is 8 percent higher compared to the same period last year mainly due to the 9.4 percent increase in net interest income but tempered by the higher tax line. However, both non-interest income and operating expenses were as just as flat against the same period last year.
Net interest income grew by nine percent due to the combined effect of a P32 billion increase in average asset base and an improvement in net spreads, while non-interest income surged by 51 percent that was boosted by the extraordinary level of trading gains.
Meanwhile, the bank’s operating expense growth showed a slow down to 9 percent with registered across all categories of expenses.
Loan growth from all segments was sustained as net loan portfolio reached to P480 billion, a 17 percent higher recorded a year ago.
“We are happy to see that loan growth has remained resilient through 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 percent return on equity,” Gil Buenaventura, senior executive vice president and chief operating officer of BPI said.
Both Middle market and SME segments contributed a 19 percent growth and the consumer lending also increased by 17 percent.
BPI’s market capitalization was P265 billion at end of June and still the largest among domestic banks. Its Basel 2 Capital Adequacy Ratio was 14. 5 percent.