Holiday spending seen lifting banks’ Q4 profits

PHILIPPINE BANKS may post faster earnings growth in the fourth quarter as holiday spending and remittance inflows revive credit demand after a subdued third quarter, according to analysts.

- Aaron Michael C. Sy

“The banking sector's slower profit growth in the third quarter reflects tighter margins from BSP rate cuts, cautious lending due to economic headwinds, and the impact of the corruption scandal on business sentiment,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said ina Viber message.

“While top banks like BDO Unibank, Inc., Bank of the Philippine Islands (BPI) and Metropolitan Bank & Trust Co. (Metrobank) held steady, the overall tone was defensive,” he added.

‘The BSP cut policy rates by 25 basis points (bps) last month, the fourth straight reduction, bringing the benchmark to 4.75%. The easing cycle that began in August last year has now delivered 175 bps of cuts.

BDO’s attributable net income rose 6% in the third quarter to P22.47 billion, supported by the continued expansion of its core businesses. Nine-month earnings climbed 4% to P63.09 billion. BPI posted a 5.2% increase in nine-month net income to P50.5 billion as revenue growth outpaced expenses.