Makati–(PHStocks)–The Bank of the Philippine Islands (PSE: BPI) posted an unaudited net income of P12.8 billion for full year 2011, a 13.4% increase over the P11.3 billion reported in 2010. This result translated to a Return on Equity of 15.2% and a Return on Assets of 1.6%.
Total revenues grew by 7% as net interest income improved by 10% due to the expansion of P48 billion in average asset base. Amid a low interest rate environment, net interest margin was not only preserved but ended higher by 13 basis points. Non interest income was better by 3% due to higher service charges, trust fees, income from the insurance companies and credit card income.
Operating expenses increased by 12% with almost half of the increase brought about by salary related increases. Manpower cost though remained at 48% of total expenses. Also increasing were premises costs, regulatory costs, and other variable costs. Impairment losses were lower at P2.15 billion in view of the continuous decline in non-performing assets.
With the focus on the safety of the Bank’s assets and the maintenance of yields at the expense of assets growth, total resources of P843 billion was slightly lower than previous year. The Bank continued its thrust of growing low cost deposits to fund its loan growth. Though total deposits contracted by about 5% to P681 billion, total intermediated funds reached P1.35 trillion, or a 12% increase as assets under management went up by 38%. The Bank’s net loan portfolio reached P453 billion, increasing by 20% from the previous year, with the growth coming from all market segments: middle market by 24%, top tier corporations by 21%, SMEs by 20%, and consumer by 12%. Loan to deposit ratio was 68% from last year’s 54%. Asset quality continued to improve as the net 30-day NPL ratio went down further to 1.9% from prior year’s 2.1%, with a reserve cover of 116%.
BPI remains as the bank with the largest market capitalization at P196 billion as of end 2011. Its capital level continues to be strong with a Basel II Capital Adequacy Ratio (CAR) of 14.9% and Tier 1 CAR at 13.4%.
BPI President and CEO Aurelio R. Montinola III commented, “2011 was both challenging and exciting. Despite Eurozone troubles, below 2010 Philippine GDP growth, and low interest rates, BPI performed creditably. We grew loans 20%, Assets under Management almost 40%, and significantly increased our loan to deposit ratio. We exceeded our 5 million customer goal, improved our ROA to 1.6%, and maintained ROE above 15% during our 160th anniversary year. We look forward to 2012 as a better year for the country and for BPI as we intend to continue our loan growth path and differentiate ourselves through superior Relationship Managers and ever growing, easy to use Online Banking.”