Interest earnings buoyed yearly profits despite higher borrowing costs.
Big banks in the Philippines witnessed their cumulative profits jump 9.3% YoY to $3.07b (PHP159.3b) from $2.81b (146.33b) in 2017 even amidst higher borrowing costs and weak currency, reports Business World.
Preliminary data from the central bank showed that income from interests on loans hit $11.43b (PHP595.91b) which was partly offset by the $3.12b (PHP162.88b) worth of interest expenses. As a result, net interest income reached $8.28b (PHP431.78b) buoyed by the 14.6% growth in loans.
Non-interest income also rose 8.7% YoY to $2.54b (P132.42b).
The Philippine banking system - which includes 42 big banks, thrift, rural, and cooperative lenders - saw its combined profits rose 6.4% YoY to $3.43b (PHP178.84b) from $3.22b (PHP168.08b) in 2017.
Philippine banks will continue to enjoy a strong capital base and healthy loan growth despite steep borrowing costs, Moody’s Investors Service said. The firm has kept its stable outlook for the said banks in 2019, which was also echoed by central bank officials.
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