The Bank of the Philippine Islands (BPI) reported that its net income for the first nine months of the year reached P7.3 billion, a 38 percent increase over last year.

The bank disclosed to the Philippine Stock Exchange that return on equity was 15 percent while return on assets stood at 1.5 percent. Total revenues grew by 16 percent as both the net interest income and non interest income grew by 14 percent and 20 percent, respectively.

The growth in net interest income was brought about by an 8 percent expansion in average asset base as well as a 13 basis points widening in net spreads. Average loans and deposits grew by 8 percent and 7 percent, respectively. In addition, loan yields improved by 27 basis points coupled with a decrease in funding cost.

Non-interest income benefited from the declining interest rate environment which provided the bank the opportunity to sell down part of its securities inventory and generate bigger trading gains. Service charges and commissions, and insurance income likewise posted increases.

Operating costs were 6 percent above the previous year due to manpower and premises-related expenses. Impairment losses reached P2.1 billion, or P547 million higher, with additional provisions set up for corporate accounts as well as possible credit losses that may arise from the recent typhoons.

For the third quarter alone, the bank generated a net income of P2.1 billion, 35 percent higher than the same period last year.

This operating result included an additional impairment loss of P100 million for typhoon related accounts and higher manpower costs from the increased retirement fund expense as well as collective bargaining agreement (CBA) related payments at the BPI parent company.

Third quarter revenues were up by 11 percent with improvements of 6 percent and 19 percent in net interest income and non-interest income, respectively.