Higher loan-loss provisions drag BPI bottom line in 2020

Ayala-led Bank of the Philippine Islands (BPI) on Thursday reported a 37.4% decline in its net income in the fourth quarter of 2020, as the lender provisioned more for loan losses given the coronavirus disease 2019 (COVID-19).

In a regulatory filing, BPI said its net income fell to P4.2 billion from the P6.8 billion the same quarter in 2019, while the full-year net income dropped 25.7% to P21.4 billion from P28.8 billion previously.

BPI attributed the decline to the higher provisions for loan losses at P28.0 billion, 5.0 times more than the P5.6 billion set aside in 2019, as the economic slowdown led to an increase in non-performing loans (NPL) during the period.

The bank's year-end 2020 NPL ratio was 2.68% with NPL coverage ratio at 115.2%, with total loans down 4.6% to P1.4 trillion primarily as a result of a slowdown in corporate lending.

Assets rose 1.3% to P2.2 trillion, while total equity grew to P279.8 billion which translates to a Common Equity Tier 1 Ratio of 16.2%, and a Capital Adequacy Ratio of 17.1%, both above regulatory requirements.

BPI earlier this month announced plans to merge with its wholly-owned thrift bank subsidiary BPI Family Savings Bank (BFSB), in efforts to enhance the banking experience of its customers.

Shares in BPI closed Thursday unchanged at P83.15 apiece.—AOL, GMA News