BPI net income up 23% to $461.09m

Net interest income rose 27% but non-interest income fell.

Bank of the Philippine Islands has reported a net income growth of 23% to almost $461.09m (PHP25.1b) in the first six months of 2023, with an equity return of 15.5%.

In a bourse filing, the bank attributed the growth to average asset base expansion, margin growth, and lower provisions.

Total revenue for the first half of 2023 rose 13.8% to $1.2b (PHP65.6b), driven by a 27.4% increase in net interest income. Net interest income for the period is $920.33m (PHP50.1b), which BPI said was thanks to average asset base expansion of 9.2% and the net interest margin (NIM) widening by 56 basis points to 4.03%.

In contrast, non-interest income fell 15.4% to $284.73m (PHP15.5b), due to the property sale gain recognized in the prior year. Removing the impact of this one-off transaction, non-interest income would be higher by P2.2b or 16.3%, BPI said.

Operating expenses for the first six months of the year rose 21.4% to PHP31.4b, primarily from the growth in spending for structural and one-time salary increases, continued investments in digitalization programs, and various marketing campaigns, rewards, and other selling expenses. 

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The non-performing loans (NPL) ratio is at 1.88% for H1, whilst NPL coverage ratio is 167.44% as of 30 June 2023. The bank also recognized provisions of PHP2b year-to-date, 60% lower than the PHP5b recovered in H1 2022. 

Total loans for the first six months of 2023 is 10.5% higher at PHP1.7t. BPI said that loans were boosted by the loan growth in the corporate, credit card, and auto portfolios of 8.0%, 42.7%, and 20.4%, respectively. 

Total deposits also grew 7.6% to PHP2.1t.

(US$1 = PHP54.44)