BPI net income down 25.7 pct in 2020 on higher provisions for bad loans


Posted at Jan 28 2021 04:31 PM

BPI net income down 25.7 pct in 2020 on higher provisions for bad loans 1
A BPI bank logo. ABS-CBN News/File

MANILA - Bank of the Philippine Islands said it booked a net income of P21.4 billion in 2020, representing a 25.7 percent decline from the previous year as it increased provisions for bad loans.

The Ayala-led lender said its fourth quarter net profit also declined 37.4 percent to P4.2 billion.

"The decline in earnings was a result of the bank booking P28 billion in provisions for loan losses for the full year 2020, as the economic slowdown leads to an increase in non-performing loans (NPLs). This provision is 5 times more than the P5.6 billion set aside in 2019," the banks said in a statement.

Due to delayed loan payments amid the economic disruptions caused by the pandemic, NPL ratio was at 2.68 percent, and NPL coverage ratio ballooned to 115.2 percent, the bank said.

Revenues however rose 10.5 percent to P101.9 billion last year on higher core income and trading gains.

But total loans declined 4.6 percent to P1.4 trillion on "slowed corporate lending."

BPI earlier announced its merger with thrift arm BPI Family Savings to fuse and increase cash reserves to meet reserve requirements of the central bank.

The Ayala-led bank was the first Philippine listed company to announce its full year earnings.

The Bangko Sentral ng Pilipinas cut interest rates by a cumulative 200 basis points, and reduced the reserve ratio for banks by 200 basis points to 12 percent last year in an attempt to encourage lending and borrowing and support the economy.

Despite this, banks have tightened lending amid rising levels of bad loans as businesses were battered by the pandemic.


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