Shares of listed Philippine banks rise in 2nd quarter

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BANKING STOCKS rose in the second quarter as rate cuts coupled with steady inflation impacted profit margins, analysts said.

They also cautioned investors to further monitor rate cuts from the Bangko Sentral ng Pilipinas (BSP) and further actions by the US Federal Reserve.

The Philippine Stock Exchange index (PSEi) inched down by 0.7% year on year to 6,364.94 at the end of the second quarter.

However, the financials subindex, which includes banks, climbed by 18.4% annually to 2,278.62 during the period.

During the period, 11 out of the country's 13 listed universal and commercial banks (U/KBs) posted growth in their share prices year on year.

Philippine National Bank (ticker symbol: PNB) led with 142.3% year-on-year surge. It was followed by Asia United Bank Corp. (AUB, 75.6%), China Banking Corp. (CBC, 69.9%), Philippine Bank of Communications (PBC, 37.6%) and BDO Unibank, Inc. (BDO, 19.2%).

Listed thrift bank Philippine Savings Bank also grew by 6.4% year on year.

Meanwhile, Philippine Trust Co. (PTC) stock contracted by 26.8%, year on year as of end-June while Union Bank of the Philippines' (UBP) dropped by 4.5%.

Aggregate net income of universal and commercial banks grew by 3.1% to P184.46 billion as of end-June from P178.91 billion in the same period a year ago, data from the BSP showed.

Gross total loan portfolio of these big lenders rose by 11% to P14.7 trillion as of end-June from P13.25 trillion a year ago.

The big banks' gross nonperforming loans (NPLs) ratio improved to 3.05% as of end-June from 3.21% the previous year.

Meanwhile, the big banks' net interest margin (NIM) — a ratio that measures banks' efficiency in investing their funds by dividing annualized net interest income to average earning asset — rose to 4.13% as of end-June from 4.04% recorded a year earlier.