The Bank of the Philippine Islands  grew its net income to a record-high of P38.6 billion or 26.4 percent higher in the first nine months compared to the same period last year due to a double-digit growth in interest income and a drop in bad loan provisions.

In a disclosure to the Philippine Stock Exchange on Thursday, BPI said its profit growth partly reflected the also record-high 33.3 percent increase to P13.5 billion in net income for the third quarter.

Revenues in the third quarter climbed by 18.3 percent to P35.3 billion, driven by higher volumes both in net interest and non-interest incomes.

This brought total revenues from January to September to P100.9 billion, up by 15.3 percent as net interest income for this period jumped by 24.5 percent to P76.8 billion.

Total loans rose by 8.8 percent to P1.7 trillion, with higher borrowings in several business areas. Loans for corporate grew by 5.3 percent, credit cards by 37.7 percent, and auto by 22.3 percent.

Non-performing loan ratio

BPI said the non-performing loan ratio of 1.97 percent slightly decreased asset quality. However, BPI stressed bad loan coverage remained adequate at 158.95 percent ratio as the bank reduced bad loan provisions by 60 percent.

Meanwhile, total deposits grew to P2.2 trillion by 6.7 percent, resulting in a loan-to-deposit ratio of 80.2 percent.

BPI's average asset base expanded by 8.1 percent, with a higher net interest margin by 54 basis points to 4.07 percent, indicating more earnings than expenses.

However, the Ayala-owned bank said these gains were offset by a 6.6 percent decline in non-interest income to P24.1 billion from a property sale realized last year.

Excluding that one-time transaction, BPI said non-interest income would have been higher by 15.7 percent or P3.3 billion as the bank saw higher volumes in credit card and insurance transactions, service fees and higher trading gains.

Operating costs

Operating costs grew by 21.3 percent to P48.6 billion as BPI heavily invested in manpower, technology and marketing.

Total assets rose 7.2 percent to P2.7 trillion, resulting in a return on assets at 1.95 percent. Meanwhile, total equity stood at P349.6 billion.

BPI remain well-capitalized, with a capital adequacy ratio of 17 percent and a common equity tier 1 ratio of 16.1 percent, both above the minimum requirement of the Bangko Sentral ng Pilipinas.

BPI has received stable outlook from several  global credit rating agencies, namely S&P, Moody's and Fitch.