Bank of the Philippine Islands (BPI) is unfazed by the 57 percent year-on-year plunge in first-quarter net profit to P3.603 billion, citing the absence of extraordinary gains, which boosted its comparative year-earlier base.
BPI expressed confidence business will remain robust during the rest of the year. The banking arm of the Ayala Group explained that profit in the comparative period of 2013 stood unusually high at P8.4 billion because of extraordinary gains in trading securities of about P5 billion.
BPI also noted dampened risk appetite this year as among the factors behind the drop in first-quarter profit.
The “trading results were not surprising, given the interest rate environment and the cut-backs in risk appetite and stronger focus on client business,” said BPI president and chief executive officer Cezar Consing.
BPI managed to post an improvement of 15 percent year-on-year in net interest income to P8.1 billion, with non-interest income, excluding securities trading, growing 16 percent to P4.3 billion.
Overall, the bank concluded the quarter with P131.3 billion in capital, reflecting proceeds received from its P25 billion rights issue. The bank’s capital adequacy ratio (CAR) stood at 15.7 percent.
“We will focus less on propriety trading, while reinforcing our interest and non-trading franchises, as well as the infrastructure that supports them,” Consing said.
Despite this backdrop of reduced trading, BPI’s core lending and deposit businesses still experienced strong growth, he added.
Net loans stood at P641.7 billion and total assets at P1.2 billion, up 25 percent and 29 percent, respectively, while total deposits reached P993 billion, a 32-percent increase against the previous year.