Bank earnings rise 4% in 1st half

PHILIPPINE BANKS’ combined net income grew by 4.14% in the first half as both net interest and non-interest earnings increased year on year.

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The banking industry’s net profit climbed to P198.14 billion in the six months through June from P190.26 billion a year ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Universal and commercial banks’ combined net income was at P184.45 billion in the first semester, while the thrift bank group booked a P10.73-billion net profit and the rural and cooperative bank sector posted net earnings of P5.34 billion. Lastly, digital banks recorded a combined net loss of P2.38 billion.

Broken down, the banking industry’s net interest income climbed 11.7% year on year to P564.98 billion in the six-month period from P505.82 billion.

This came as interest income grew 9.84% to P800.86 billion from P729.14 billion, faster than the 5.37% increase in interest expense to P234.66 billion from P222.7 billion.

Meanwhile, non-interest income rose 14.59% to P119.74 billion from P104.49 billion the year prior.

This was mainly driven by the 236.16% surge in trading income to P46.86 billion from P13.94 billion a year ago. Fees and commissions income also increased 15.55% to P89.02 billion from P77.04 billion.

Higher net interest and non-interest earnings partly offset the increase in the sector’s expenses in the period. Banks’ non-interest expenses grew by 12.56% year on year to P384.03 billion in the first half from P341.19 billion.

This was due to increases in spending on compensation, taxes and licenses, fees and commissions, and other administrative expenses. Banks also recorded higher impairment losses and provisioning.