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BPI 9-month net income slips 22.1% on higher loan loss buffering


Ayala-led financial giant Bank of the Philippine Islands (BPI) saw a double-digit decline in its first nine months of 2020 bottom line, dragged by increased buffering for potential credit losses to be incurred due to the COVID-19 pandemic. In a disclosure to the Philippine Stock Exchange, BPI said it booked P21.06 billion in provisions for loan losses in January to September period “in anticipation of an increase in NPL (non-performing loans) levels in light of the continued weakness in the economic landscape.”


Non-performing loans refer to debts, principal and/or interest, which are unpaid for more than 90 days from the contractual due date. BPI said its loan loss provision is 4.6 times more than the P4.58 billion set aside during the same period in 2019. The higher loan loss buffer resulted in a year-to-date net income of P17.17 billion, down 22.1% from P22.03 billion posted year-on-year.


In the third quarter alone, the bank’s net income stood at P5.50 billion, down 33.7% from P8.29 billion a year earlier. Total revenues for the nine-month period increased by 9.7% to P77.88 billion. Net interest income grew by 11.8% to P54.40 billion, while non-interest income reached P23.48 billion, up 5.1% primarily from robust securities trading gains.


Total operating expenses as of September 30, 2020 amounted to P36.48 billion, down 1.6% due to lower premises, technology, and various discretionary costs such as marketing, advertising, and management and professional fees. Total loans reached P1.38 trillion, up 0.9% year-on-year, with growth led by the mortgage and corporate loan segments at 8.7% and 2.6%, respectively. Total deposits increased to P1.68 trillion, up 4.0% year-on-year, boosted by CASA (current account-savings account) deposits which grew by 14.7%.


In August, BPI raised P21.5 billion for its pioneering COVID Action Response, or CARE Bonds, to finance and refinance eligible micro, small and medium enterprises (MSMEs), one of the sectors hardest hit by COVID-19. BPI exceeded initial targets for the CARE Bonds, as subscriptions for the offering reached more than seven times the initial planned issue size of P3 billion. The CARE Bonds have a tenor of 1.75 years and an interest rate of 3.05% per annum.


Source: gmanetwork.com

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