The Philippine banking industry performed well in terms of profits with most of the listed universal and commercial banks posting growth in their net income for the first quarter of the year.
This prompted the country’s biggest banks to provide an optimistic view on their businesses for the full-year 2017.
Five out of seven listed universal and commercial banks that already disclosed their first-quarter performance to Philippine Stock Exchange posted growth in net income from a year earlier with net interest income remaining the major earnings driver.
Sy-family led Banco de Oro (BDO) Unibank Inc. said that for the first quarter of 2017, it earned a net income of P5.8 billion, up 6 percent year-on-year.
Net interest income remained the major earnings driver, rising by 19 percent to P18.4 billion.
Customer loans accelerated by 21 percent to P1.5 trillion, with all market segments turning in robust expansion rates.
Meanwhile, total deposits grew by 13 percent to P1.9 trillion, backed by the 17 percent jump in low-cost current account/savings account deposits.
Metropolitan Bank & Trust Co. (Metrobank) reported unaudited consolidated net income of P5.6 billion for the first quarter 2017, up 6 percent compared with the same period last year.
For the period, Metrobank’s total revenues hit P19.9 billion while operating expenses grew at just 6 percent to reach P11.1 billion.
As of quarter-end, its total deposits grew 16 percent year-on-year to reach P1.4 trillion. More importantly, CASA deposits rose at a faster clip of 19 percent.
Metrobank said the sustained build-up of low cost deposits fueled the acceleration in the loan portfolio, which in turn climbed 26 percent to P1.1 trillion.
Robust loan growth and relatively low funding cost contributed to the 14-percent increase in the bank’s net interest income to P14.5 billion.
Metrobank’s net interest margins for the period improved to 3.7 percent, one of the highest rate among its peer banks.
Non-interest income of P5.4 billion was boosted by the 18-percent growth in service fees and commissions and income from trust operations, which totaled P3.0 billion.
In addition, the bank reported P1.1 billion in net trading and foreign exchange gains and P1.3 billion in miscellaneous income.
BPI, China Bank, East West up
The Bank of the Philippine Islands’ (BPI) in the first quarter of 2017, reported that its net income rose 25.6 percent relative to the same period last year, to P6.25 billion.
Total revenues reached P17.96 billion, up 17.6 percent. Non-interest income also registered strong growth, rising 22.6 percent to P6.46 billion on higher trading gains, service charges, underwriting fees, and income from asset sales.
BPI’s operating expenses rose 11.2 percent to P8.73 billion in the first quarter, driven mainly by additional manpower, regulatory costs, and spending on operational infrastructure.
China Banking Corp. posted a 6 percent growth in net income to P1.47 billion in the first three months of 2017 on the back of strong growth in lending and core fee-based income.
Its operating income reached P5.66 billion, up 7 percent compared with the same period last year, while net interest income rose 14 percent to P4.47 billion.
The bank’s non-interest income (excluding trading gains) grew by 22 percent to P1.08 billion from the gain in service charges, fees from bancassurance, investment banking and trust, as well as income from asset sales.
China Bank’s core recurring income (operating income excluding trading gains) was up 15 percent to P5.55 billion from P4.80 billion in the first quarter of 2016.
Growth in operating expenses were limited to 8 percent, or to P3.88 billion, even with the continued expansion in its branch and distribution network and investments in people and technology to support the growth of new businesses.
EastWest Bank also reported that its first-quarter 2017 net income increased 54 percent to P1.2 billion on account of robust loan growth and improving productivity.
Total assets were up 22 percent from last year, bannered by the 25-percent increase in total loans.
Total revenues in the first quarter of 2017 were up 18 percent to P6 billion.
Core revenues, or income after taking out volatile trading profits, grew 26 percent to P5.9 billion, while operating expenses increased by 13 percent to P3.2 billion.
EastWest’s total deposits increased by 26 percent year-on-year, led by the 32 percent growth in low cost current account and savings account deposits.
Security Bank, PNB profits lower
On the contrary, Security Bank Corp. reported a lower P2.81-billion net income in the first three months of the year, down 6.3 percent from the previous year’s P3 billion.
Its non-interest income including securities trading gains went down to P1.8 billion from P2.4 billion a year ago.
Net interest income increased 27 percent to P4.4 billion from P3.5 billion a year ago, more than offseting the decrease in non-interest income.
Security Bank’s loan book grew 28 percent year-on-year to P305 billion, while wholesale loans increased 26 percent. Consumer loans grew 51 percent, while net interest margin was maintained at 3.1 percent.
The Philippine National Bank (PNB) posted net profits of P1.2 billion for the first three months of 2017, lower than the P2.6 billion a year ago.
Interest earned from loans and receivables grew 13 percent year-on-year on the back of the 18-percent growth in outstanding balances of the loan portfolio.
Interest income from placements with banks and others increased by more than four-fold from the year-ago level as the bank accessed the term deposit facility, which offered better yields.
Non-interest income amounted to P1.5 billion, lower compared with the year-ago level that included gains of P1.8 billion from major disposals of foreclosed properties and collections of non-performing assets, in line with the bank’s strategy to reduce non-earning assets.