BPI targets record profit this year
BANK of the Philippine Islands (BPI) targets to post another record-high net income this year as it sees strong loan demand despite high interest rates, its top official said.
“That’s the plan. There are good tailwinds. Loan demand continues to be resilient,” BPI President and Chief Executive Officer Jose Teodoro K. Limcaoco told reporters on the sidelines of the launch of the bank’s new mobile application when asked if the bank can beat 2022’s record net profit.
He said BPI’s first-quarter financial performance was “good,” which bodes well for their earnings this year.
BPI booked an all-time high net income of P39.6 billion in 2022, 66% higher from the previous year’s level, driven by strong loan growth, higher net interest margins, and lower loan loss provisions.
Mr. Limcaoco said demand for credit remains strong, even as the Bangko Sentral ng Pilipinas (BSP) has continued to hike benchmark interest rates amid elevated inflation, with loan growth expected to be at around 10% this year.
The BSP has raised borrowing costs by a total of 425 basis points since May 2022, with its key rate now at 6.25%, up from the all-time low of 2% seen during the height of the coronavirus pandemic.
The economy’s reopening will continue to drive loan demand for the first half of the year, but base effects are expected to fade by the second semester, Mr. Limcaoco said.
“You have to remember that Philippine businesses have always been used historically to high rates. It was only during the pandemic when rates really came down. During the pandemic, a few companies took advantage of the low rates,” he said.
“Affordability is still there… The only one where rates have really gone up is I think really credit cards… Even that, we have not seen a rise in NPLs (non-performing loans). People are very judicious about their use of credit, which is good,” Mr. Limcaoco added.
He said the bank’s NPL level is steady and is expected to “settle down, but really driven by the better performance of existing loans and new loans.”
“Since the pandemic ended, our [NPL] cover has continued to rise because we continued to provision without the underperformance,” he said.
NEW APPMeanwhile, BPI on Wednesday launched its new mobile banking application as it aims to phase out its old app by the second semester.
“We’re proud of the new BPI app, and we know there’s room to continue improving. While we look at the best technology and digital solutions to ensure that we deliver excellent service, we anchor the designed experiences to what our customers need,” Mr. Limcaoco said in a statement.
The new app introduces features such as artificial intelligence-powered insights on spending and saving, BPI Head of Consumer Banking and Executive Vice-President Maria Cristina “Ginbee” L. Go said during the launch event.
It will also allow clients to pre-book branch visits, she added.
“We are likewise transforming our branches into financial advisory centers in new branch formats,” Ms. Go said.
BPI’s shares climbed by P1.65 or 1.65% to close at P101.50 apiece on Wednesday. — A.M.C. Sy
