BPI first-half earnings dip as higher provisions offset revenue gains

Insider Spotlight

• First-half net income slipped 0.4 percent to P32.8 billion as higher credit provisions offset double-digit revenue growth
• Total revenues climbed 12.4 percent to P104 billion, driven by stronger net interest income and fee-based businesses
• Provisions surged 84 percent amid a weaker macroeconomic outlook, while asset quality stayed broadly stable
  
  
  

Bank of the Philippine Islands (BPI) reported first-half net income of P32.8 billion, down 0.4 percent from a year earlier, as sharply higher provisions for expected credit losses outweighed double-digit revenue growth despite sustained lending momentum.

Why it matters

The results underscore how Philippine banks continue to post healthy revenue expansion from lending and fee-generating businesses, but are becoming more cautious by setting aside larger reserves against potential loan losses as the macroeconomic outlook weakens.

By the numbers

In a disclosure to the bourse on Thursday, July 16, 2026, the Ayala-controlled bank said total revenues rose 12.4 percent year on year to P104 billion, supported by a 12.5-percent increase in net interest income as average earning assets expanded 11.3 percent and net interest margin widened by five basis points to 4.63 percent. 

Non-interest income increased 12.1 percent to P24 billion, led by an 18-percent rise in fees from credit cards, investment banking, insurance, and wealth management.

Operating expenses increased 13.8 percent to P48.6 billion, reflecting higher manpower, technology, and business volume-related costs, resulting in a cost-to-income ratio of 46.8 percent. 

Meanwhile, provisions jumped 84 percent to P13.3 billion as expected credit losses increased due to deteriorating macroeconomic conditions and outlook. The non-performing loan ratio was unchanged quarter on quarter at 2.42 percent, while the coverage ratio improved to 92.98 percent.

The balance sheet

Total assets grew 9.6 percent to P3.7 trillion, while loans expanded 12.4 percent to P2.7 trillion. Institutional loans rose 8.7 percent, while non-institutional lending increased 21.2 percent, driven by small and medium enterprises, credit cards, and personal loans. 

Deposits climbed 9.2 percent to P2.8 trillion, with the loan-to-deposit ratio reaching 93.6 percent. Total equity increased 6.4 percent to P482.6 billion, lifting the indicative Common Equity Tier 1 ratio to 14 percent, while its capital adequacy ratio remained at 14.8 percent, both above regulatory requirements. —Daxim L. Lucas | Ed: Corrie S. Narisma