BPI income up 9.5% to P6.9B in first 9 months

By Ted P. Torres
The Philippine Star 11/01/2006

The Ayala-owned Bank of the Philippine Islands (BPI) posted a consolidated net income of P6.9 billion in the first nine months of 2006, or 9.5 percent higher than the P6.3- billion earnings in the same period last year, the bank said in a statement.

In the third quarter alone, net income grew to P2.3 billion, an increase of 11 percent from a year earlier.

BPI said a seven-percent growth in total revenues also contributed to the positive growth in income.

Operating expenses, meanwhile, increased by 15 percent but these were held down by P687 million lower after-tax impairment losses. Return on equity and return on asset stood at 15.6 percent and 1.8 percent, respectively.

BPI had total assets worth P529 billion as of end-September this year.

With comparable year-ago levels already reflecting the acquisition of the mid-sized Prudential Bank, deposits of P424 billion reflected a five-percent growth. Net loans expanded 3.8 percent to P226 billion, higher than the industry growth of 2.5 percent.

The bank's stocks are currently trading 29 percent over the adjusted end-2005 price of P45.42 each. BPI's market capitalization stood at P158 billion as against a book value of P64 billion.

BPI recently declared a special cash dividend of P1 per share. Together with the regular cash dividend of P1.80 per share, 90 centavos of which was paid out in August, total cash yield on BPI shares amounts to 4.5 percent from last Monday's closing price of P62.

Operating expenses, on the other hand, were up 20 percent but were partly neutralized by a P502 million decline in after tax impairment losses. Impairment losses were accelerated last year with the implementation of the new Philippine Financial Reporting Standards.

Net interest income posted a moderate four percent expansion mainly on account of an 11 percent growth in average asset base. The impact of the higher volumes were softened by a 25-basis point drop in spreads as interest rates fell due to excess liquidity, improved government finances and contained inflation.

Non-interest income recorded a stronger increase of 14 percent. Major gains came from securities and foreign exchange trading, property rentals, investment management and trust fees, and service charges and commissions.

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