BPI bounces back
By JIMMY CALAPATI
After four consecutive quarters of
contraction, Bank of the Philippine Islands (BPI) yesterday said
its first-quarter net income rose 86.1 percent from a year
earlier on strong revenues and interest savings.
BPI president Aurelio Montinola III said
despite its strong financial results, the bank will continue to
be watchful of any adverse turn in the local economy in the
months ahead.
"We acknowledge the severity of the present
crisis, and that the local economy and the banking industry
remain vulnerable to a further deterioration in global economic
activity. Signs of stabilization overseas appear tentative and
cannot be construed as the beginning of an enduring recovery,"
Montinola said.
BPI, partly owned by conglomerate Ayala
Corp., and Southeast Asia’s biggest bank DBS, said it posted a
net income of P2.9 billion in the first quarter.
BPI is the country’s third-largest bank in
terms of assets.
The bank said double-digit growth in
revenues, net interest income, corporate and consumer loans, and
a higher deposit base helped lift its quarterly profits.
Net interest income grew by 22.1 percent,
boosted by the expansion in the average asset base, higher
yields on loans and lower cost of funds.
The bank said its non-interest income posted
a turnaround with a 52.7 percent growth, owing to gains from
securities trading.
BPI said it maximized trading opportunities
offered by the low interest rate environment.
Corporate and consumer loans registered
growth rates of 13.8 percent and 18.9 percent, respectively.
Deposits rose by 8.8 percent.
BPI shares climbed 3.95 percent in late
morning trade, outperforming Manila’s main index, which gained
2.11 percent.
Last year, BPI net income reached P6.4
billion, down 35.8 percent from 2007.
The bank said this is a direct effect of the
global financial turmoil that started last year.
For the fourth quarter of 2008, BPI said it
posted profits amounting to P1.1 billion, but this was 26.2
percent lower from the fourth quarter of 2007.
BPI said revenues for the fourth quarter improved by 6.5
percent but were tempered by a 13 percent increase in operating
expenses due to the P349 million additional retirement expense
following the valuation of the bank’s retirement fund.
With the prevailing uncertainties, BPI said
it looks at 2009 with caution and will continue what it started
in 2008 — "back to basics" banking.
"We are aware of the challenges posed by the
highly uncertain and volatile economic environment on business
conditions. But even in these trying times, we intend to do our
share to keep the economy going," Montinola said.
He added that they are determined to keep
their lending windows open and ensure that customer funds are
prudently managed and safeguarded.
"We know that in good times, banking is about
growth and earnings. However in difficult times, banking is
about liquidity, solvency and trust," Montinola added.
BPI said total resources stood at P667.4
billion at the end of 2008, 4.7 percent higher over 2007.
Deposits likewise improved by 5.2 percent to
P540.3 billion.
BPI added that its market capitalization
stood at P125 billion, notwithstanding the 24.9 percent drop in
the stock price.
Yearend capital was lower at P63.9 billion as
actual dividend payments of P8.0 billion exceeded the net income
for the year and on lower market valuation of securities.
Overall capital adequacy ratio of 14.1
percent remained sufficient and well above the 10 percent
regulatory minimum.
Non-performing loans ratio improved to 2.9
percent, and non-performing assets dropped below 10 percent.
Of the country’s top 10 financial
institutions, the BPI posted the highest profits for the third
quarter of last year.
However, its P5.32 billion net income was
still one-third lower than the P7.64 billion reported during the
same period a year ago, as the Ayala-led lender was also
affected by the global slowdown.
Aided by the bank’s risk management policies, BPI was the
only major bank with no exposure to Lehman Brothers, AIG and the
sub-prime mortgage industry.