050307: BPI profit up 28% to P3.2B in Q1

By Ted P. Torres
The Philippine Star 05/03/2007

The Bank of the Philippine Islands (BPI) reported a consolidated net income of P3.2 billion in the first three months of 2007, an improvement of 28 percent from a year earlier as non-interest income and trading gains increased, the bank said in a statement yesterday.

Non-interest income, derived mainly from foreign exchange and securities trading, and its insurance subsidiaries, grew 52 percent. Trading gains, meanwhile, increased 61 percent due to the 255-basis point drop in the average Treasury bill rate.

BPI said earnings were also boosted by a P416 million non-recurring gain from the sale of a real estate property of an insurance subsidiary and a 26-percent expansion in total revenues.

As a result, BPI said its return on equity and return on assets registered higher at 20.5 percent and 2.3 percent, respectively, from the year ago levels of 15.2 percent and 1.7 percent.

Its asset base grew 10 percent, resulting in an increase of 11 percent in net interest income.

The bank likewise said operating expenses increased 20 percent to include some income tax settlements pertaining to prior years and some one-off accruals. Notwithstanding this, BPI’s cost-to-income ratio improved to 50 percent from 52 percent on stronger revenue growth.

Impairment losses on loans were likewise accelerated to P719 million from P369 million the previous year.

The bank’s total resources grew 12 percent with deposits posting a higher rate of 14 percent.

Total loans, meanwhile, posted a modest increase of five percent. Consumer loans, however, continued to grow at a faster pace of 11 percent, with mortgages registering a more robust 16 percent rate of increase.

The first quarter also saw the Bank of America NA winning the bid for the purchase of the bank’s P3.7 billion non-performing loans (NPLs).

The bank also recently obtained the approval of the Financial Services Authority to open a wholly-owned bank subsidiary in the United Kingdom. The BPI Europe Plc will engage in current account, savings and time deposit taking, personal loans, credit cards and remittance business.

BPI declared last month a P0.90 cash dividend for the first semester. It also reported that the Bangko Sentral ng Pilipinas (BSP) approved recently the issuance of P5 billion in long term negotiable certificates of deposit (LTNCD) Series 1.

BPI reported a consolidated net income of P9 billion last year, eight percent better than the P8.4 billion income in 2005. Net income grew due to the marked nine percent growth in total revenues.

 

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