BDO and BPI reported strong Q1 earnings growth

Two of the country’s biggest banks on Thursday reported double-digit first-quarter net profit growth on the back of higher loans and deposits.

BDO Unibank Inc., the country’s largest bank by assets, said net profit rose 13% in the first quarter to 11.7 billion pesos from a year ago, driven by the main activities.

The Bank of the Philippine Islands said its profits climbed 59.6% in the first quarter to 8 billion pesos from a year earlier, thanks to higher net interest income, provisions for lower losses and normalized tax charges.

BDO said the loan portfolio grew by 7% to 2.4 trillion pesos thanks to strong demand from corporate borrowers, the recovery of the middle market and the resilience of the consumer segment.

Deposits also increased to 2.8 trillion pesos, driven by an 11% increase in current/savings account deposits, which now account for about 86% of total deposits. This translated into net interest income of 33.9 billion pesos in the first quarter, up 6% from a year earlier.

Non-interest income also rose 9% to P16.7 billion, driven by fees and insurance premiums. Trading and foreign exchange gains were in line with normalized activity levels.

BDO said operating expenses rose 3% to 31.8 billion pesos, while asset quality continued to improve with the non-performing loan ratio down to 2.72% from 2. .81% last year.

The bank maintained its conservative credit and provisioning policy with provisions at 3.7 billion pesos compared to 2.9 billion pesos a year ago, resulting in higher NPL coverage at 120.8% . The total capital base strengthened to 429.9 billion pesos, with the capital adequacy ratio and Common Equity Tier 1 ratio both increasing to 14.6% and 13.5%, respectively, which was above the regulatory minimum.

BDO said the sustained earnings performance, robust business franchise and strong capital base put the bank in a good position for long-term sustainable growth.

Meanwhile, BPI said revenue improved 4.3% in the first three months to 25.4 billion pesos, while net interest income rose 12.7% to 19 billion pesos, thanks to an 11 basis point increase in the net interest margin to 3.42%.

Non-interest income decreased by 14.5% to P6.4 billion, due to lower gains on corporate actions, service charges, bank charges and fees subscription.

This was tempered by the notable year-on-year rebound in foreign exchange gains of P702.1 million.

BPI said total operating expenses rose 6.5% to 12.6 billion pesos from a year ago, due to strong increases in all cost categories as volume transactions was increasing, given the economic reopening and the easing of mobility restrictions.

The bank booked provisions of 2.5 billion pesos as of March 31, down 30.6 percent from the 3.6 billion pesos it booked in the same period last year.

Total loans increased 7.1% to 1.5 trillion pesos, driven by higher loan volumes across the board, driven by growth in corporate, mortgage and credit card portfolios 7.7%, 6.6% and 12.2%, respectively.

Total deposits also increased by 13.1% year-on-year to reach 1.9 trillion pesos, with CASA and term deposits posting increases of 10.9% and 23.3%, respectively.

Total assets reached P2.4 trillion, up 9.88% from the previous year.

BPI launched in March BizKo, a subscription-based digital platform for micro, small and medium enterprises, which offers an integrated online billing and collections system to help them with their cash and other banking needs.

BizKo is the fifth of seven digital platforms in the bank’s digital transformation roadmap.

BPI has also partnered with AC Energy Corp., another Ayala company for the country’s first energy transition financing.