The country's largest bank by assets saw its net profit decline by 1.43% in the second quarter due to higher costs and loan loss provisioning, coupled with lower trading gains.
The bank's attributable net income decreased to P20.61 billion in the period from P20.91 billion in the year prior, bringing its first-half earnings to P40.72 billion, up from P40.62 billion a year ago.
The bank sustained strong operating momentum, delivering mid-teens loan growth, double-digit growth in pre-provision operating profit and improved asset quality, according to the bank's quarterly report.
Net interest income rose by 10.13% to P55.482 billion in the second quarter from P50.58 billion in the same period last year, driven by a 13.7% increase in interest earnings to P82.16 billion.
However, net interest margin went down to 4.2% as of end-June from 4.31% a year ago, due to the carryover effects of the central bank's policy rate cuts and competitive market pricing.
The bank's net loans and other receivables expanded by 14% year on year to P3.95 trillion at end-June, supported by a 15% growth in gross customer loans amid double-digit expansion across all segments.
Its nonperforming loan (NPL) ratio improved to 1.64% from 1.75% a year ago, with NPL coverage standing at 132%.
Other operating income went up by 1.71% to P19.68 billion from P19.35 billion, driven mainly by higher foreign exchange gains, while trading gains slumped sharply and service charges, fees, and commissions also slipped.
The bank's income from insurance operations increased by 4.6% year on year to P2.34 billion in the second quarter.
However, the bank's operating expenses rose to P44.6 billion from P41.502 billion, while provisions for impairment losses jumped by 56.88% year on year to P6.62 billion.
On the funding side, total deposits stood at P4.57 trillion at end-June, rising by 13% year on year as demand deposits grew by 8% and time deposits expanded by 33%.
The bank's assets expanded by 15% year on year to P5.9 trillion as of June, supported by growth in customer loans and investment securities, funded by deposits and its issuances of peso-denominated ASEAN Sustainability Bonds.
Total equity went up by 7% to P655.9 billion, supported by its continued profitability, while the bank's capital adequacy ratio went down to 14.22% at end-June from 15.43% a year prior.
Liquidity ratio was at 31.16%, and the bank remains well-positioned to navigate prevailing uncertainties and capture opportunities in an evolving business environment, according to the bank.
The bank's shares climbed by P2.20 or 1.79% to end at P125.20 each on Monday.
