BPI Achieves Record-Breaking ₱48 Billion Net Income for First Nine Months of 2024
The Bank of the Philippine Islands (stock: BPI), one of the country's largest private lenders, posted a record net income of ₱48 billion for the first nine months of 2024. This marks a remarkable 24.3% growth compared to the same period last year, highlighting the bank's solid performance despite challenging economic conditions. BPI’s impressive results can be attributed to strong revenue growth and its continued focus on optimizing operating efficiencies.
Key Financial Highlights:
- Revenue Growth: BPI's total revenues for the period surged by 24.7% year-on-year to ₱125.8 billion. This increase was mainly fueled by a 22.2% jump in net interest income, which reached ₱93.8 billion. The bank also saw significant gains in non-interest income, up 32.4% to ₱31.9 billion, with a notable boost from securities trading gains of ₱3 billion.
- Loans and Margins: Average loans grew by 18.9%, reflecting strong demand across BPI's various loan portfolios. Personal loans saw an impressive increase of 103.3%, business banking grew by 99.3%, and microfinance expanded by 65.2%. These increases pushed BPI’s net interest margin up by 22 basis points to 4.29%, a key measure of profitability in banking.
- Operating Costs and Efficiency: Operating expenses rose 22.1% to ₱59.4 billion, driven by higher manpower, technology investments, and transaction processing costs. However, the bank’s cost-to-income ratio remained at a healthy 47.2%, reflecting its ability to manage growth efficiently.
- Provision for Loan Losses: The bank set aside ₱4.8 billion in provisions for credit losses, a 60% increase from the previous year. Despite this, BPI’s non-performing loan (NPL) ratio remained stable at 2.3%, with a strong NPL coverage of 111%.
Sustained Quarterly Growth
BPI also achieved its highest-ever quarterly income in the third quarter of 2024, recording ₱17.4 billion, up 29.4% year-on-year. This robust quarterly performance was driven by a 26.3% rise in quarterly revenues to ₱44.6 billion. With consistent growth across all sectors, BPI’s total assets now stand at ₱3.2 trillion, an increase of 17.2% from last year.
Deposits and Capital Strength
BPI's total deposits grew by 14.5% year-on-year, reaching ₱2.5 trillion. The bank maintained a strong CASA (Current Account, Savings Account) ratio of 63%, a key indicator of its ability to attract low-cost deposits. The loan-to-deposit ratio stood at 85.9%, showcasing efficient capital utilization.
The bank's capital position remains solid, with total equity of ₱433.3 billion and a Common Equity Tier 1 (CET1) Ratio of 14.8%, well above regulatory requirements. Its overall Capital Adequacy Ratio (CAR) stood at 15.5%, ensuring that the bank is well-capitalized to support future growth.
Key Milestones and Sustainability Efforts
2024 also marked significant milestones for BPI. In August, the bank celebrated its 173rd anniversary by launching an innovative banking service that allows customers to deposit and withdraw cash from select retail stores in areas without BPI branches. This initiative underscores BPI's commitment to financial inclusion, particularly in underserved regions.
BPI also issued its largest thematic bond to date, a ₱33.7 billion Sustainable, Environmental, and Equitable Development (SEED) bond, which was six times oversubscribed. The bond offers a 6.2% annual coupon and supports the bank's initiatives towards sustainable finance.
On the global stage, BPI’s strong performance was recognized by credit rating agency S&P Global, which affirmed its BBB+ rating with a stable outlook. This rating is on par with the Philippine sovereign rating, further solidifying BPI’s credibility in the international financial markets.
Stock Performance and Outlook
BPI's stock has also reflected its strong financial performance, with the bank’s shares up 35% year-to-date on the Philippine Stock Exchange (PSE). This surge in stock price indicates strong investor confidence in the bank’s ability to maintain growth and deliver shareholder value.
Looking ahead, BPI remains well-positioned to capitalize on future opportunities, with a continued focus on expanding its loan portfolio, enhancing digital capabilities, and promoting sustainable finance. With a solid balance sheet and a strategic outlook, BPI is poised for further growth in the years to come.