BANK of the Philippine Islands (BPI) saw its net income increase by 9% year on year in the first quarter as it booked higher revenues.
The bank’s net profit rose to P16.6 billion in the quarter ended March 31 from P15.3 billion in the comparable year-ago period, it said in a disclosure to the stock exchange on Monday. This was also 18.3% higher than its fourth-quarter net earnings.
“We reported our first-quarter earnings of P16.64 billion, driven by a very strong net interest income and growth in expenses that were slightly lower than our growth in revenues,” BPI Chief Executive Officer Jose Teodoro K. Limcaoco said at a media briefing on Monday.
The bank’s first-quarter performance translated to a return on equity of 15.35% and a return on assets of 2.05%. Its financial statement was unavailable as of press time.
BPI’s revenues climbed by 13.1% year on year to P44.7 billion in the first quarter.
This was driven by the 15.3% increase in its net interest income, which it said came amid an 8.6% increase in its average earning asset base and a 30-basis-point (bp) expansion in net interest margin to 4.49%.
The bank’s non-interest income rose by 6.3% to P10.3 billion in the first quarter as higher credit card fees and transaction-based service charges more than offset the drop in its foreign exchange and trading income.
Meanwhile, BPI’s operating expenses grew by 12.7% year on year to P20.3 billion in the period amid higher manpower, technology, and business volume-related expenses.
Its provisions for losses also stood at P3 billion.
Still, its cost-to-income ratio improved by 16 bps to 45.4%.
BPI’s gross loans expanded by 13.2% to P2.3 trillion at end-March as it saw “strong growth” across all segments, especially non-institutional loans, it said.
Its nonperforming loan (NPL) ratio stood at 2.26%, while its NPL coverage ratio was at 100.11%.
On the funding side, deposits with the bank increased by 6.3% year on year to P2.6 trillion.
This brought the loan-to-deposit ratio to 89.4%.
BPI’s assets grew by 6.9% year on year to P3.3 trillion at end-March.
Total equity also rose by 11.3% to P448.6 billion.
It recorded an indicative common equity Tier 1 ratio of 14.69% and a capital adequacy ratio of 15.43% in the period.
Mr. Limcaoco said BPI targets faster net income growth this year versus the 2024 pace as it continues to increase the share of non-institutional loans — which stood at 28.8% as of the first quarter — in its portfolio.
BPI’s attributable net income rose by 20.04% to a record P62.05 billion last year from P51.69 billion in 2023.
“Our plan is to have net income this year that will exceed last year’s net income, and if you take a look at our first-quarter results, I think we should be fairly on track,” he said.
“My personal feeling is that the institutional book could be dampened by global tariffs. But I think our non-institutional book, for several reasons, could show fairly strong resilience this year.”
BPI wants non-institutional loans to make up 30% of its lending portfolio eventually, Mr. Limcaoco said, as this could help boost their margins.
He added that for this year, BPI expects its institutional loans to grow by roughly 10% and non-institutional loans to expand by about 20%.
“Non-institutional will carry higher NPLs, but they also carry higher margins. And that’s why our NPL has gone from 1.8% last year to now 2.2%,” Mr. Limcaoco said, but added that they do not expect asset quality to worsen further
“There shouldn’t be a deterioration in the NPL from here. I’m seeing risk here, but it’s managed risk,” he added.
BPI Chief Finance Officer and Chief Sustainability Officer Eric Roberto M. Luchangco said the bank’s loans are expected to grow by 12% to 13% this year.
He added that the bank aims to increase its sustainability loan portfolio to P1 trillion by 2026 from P880 billion at end-2024.
“I think we’re tracking ahead of that goal, and so I’m quite comfortable to say that we’ll probably meet that goal ahead of our target. It continues to be something that’s of interest to us,” Mr. Luchangco said.
BPI shares rose by P3.10 or 2.35% to close at P135.10 apiece on Monday. — A.M.C. Sy
