Banks turns in P101-billion profit in first quarter

Philippine banks turned more profitable in the first quarter, with total profits rising by 10.6 percent to P101.9 billion from P92.1 billion a year ago, driven by higher net interest income, according to a report by Philippine Star.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the industry’s total operating income increased by 12.2 percent to P336.9 billion as net interest income grew by 11.7 percent to P276.23 billion.

Interest earnings jumped by 11.1 percent to P395.99 billion, while interest expenses went up by 9.6 percent to P119.32 billion.

The increase in net interest income came as the BSP decided to keep interest rates elevated before it began its easing cycle.

The key policy rate currently stands at 5.5 percent, after the Monetary Board cut borrowing costs by a total of 100 basis points since August last year.

The BSP is widely expected to continue its easing cycle as inflation continues to be stable, while economic growth shows signs of slowing and demand for stimulus builds.

Non-interest income of banks operating in the Philippines also jumped by 14.5 percent to P60.7 billion in the first quarter. Earnings from fees and commissions booked a 19.2-percent increase to P44.59 billion in the first three months.

Data also showed that the industry’s provision for credit losses on loans and other financial assets was higher by 38.9 percent at P34.89 billion, while soured loans written off stood at P1.25 billion, surging by 71.8 percent from the P139.311 billion a year ago.

Separate BSP data showed that the total assets of the banking industry increased by 7.8 percent to P27.6 trillion as of March from P25.6 trillion in the same period in 2024. Banks’ resources include funds and assets such as deposits, capital, bonds and debt securities.

As of December last year, Sy-led BDO Unibank Inc. stood as the number one bank with the largest resources at P4.67 trillion, followed by Land Bank of the Philippines with P3.43 trillion and the Ayala Group’s Bank of the Philippine Islands with P3.06 trillion.

Last year, bank earnings jumped by 9.8 percent to hit an all-time high of P391.28 billion in 2024 from P356.49 billion in 2023, on the back of higher interest income.