The Ayala Group’s Bank of the Philippine Islands (BPI) continued its winning streak in the first six months of 2024 with a net income of P30.6 billion, an increase of 21.5 percent.
Revenues of the country’s third-largest lender jumped 23.8 percent to P81.2 billion over the same period in 2023.
BPI is accelerating growth plans by kicking off the sale of P5 billion in ASEAN sustainable bonds, starting today until Aug. 2 this year. The offer has an option to upsize.
Big picture
BPI’s strong first-half performance puts it on track for a third consecutive year of record-breaking profits that started in 2022.
BPI benefited from both higher loans and expanding margins, thanks to elevated interest rates. Non-interest income, which includes foreign exchange earnings and fees, also surged during the first semester.
These resulted in a return on equity of 15.5 percent and return on assets of 2 percent.
Nearing price target
AP Securities senior research analyst Francis Ferdinand Subido said BPI’s recent performance in the second quarter was in line with their estimates.
The stockbrokerage house could soon revise its buy rating on BPI to a hold given recent gains. The bank's share price rose 4.3 percent to P126 per share on Thursday, which Subido said is near their price target of P128.42 per share.
More key figures
BPI ended the period with a net interest income of P61.3 billion, an increase of 22.2 percent.
This was coupled with an 18.4 percent expansion in loans to P2 trillion and a net interest margin of 4.26 percent, up 23 basis points.
The other major component is non-interest income, which grew almost 29 percent to P19.9 billion. Part of this was a 58.6 percent spike in foreign exchange profits to P2.2 billion.
Bad loans
BPI noted an increase in bad loans, measured by the non-performing loans ratio, which stood at 2.2 percent.
It responded by increasing the safety net to cover loan losses by 50 percent to P3 billion during this period. The bank’s overall financial health remained solid, with bad loans coverage at 127.6 percent.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.