Major Banks Report Higher Earnings in First Half of 2024

A number of major banks in the Philippines saw improvements in their financial performances in the first half of the year. These are driven by the stronger reception of their core businesses and services, including consumer loans.

Leading the charge is BDO Unibank, Inc.—the country's biggest lender—which reported an increase in its net earnings to P39.4 billion from January to June, a 12-percent rise from P35.25 billion in the same period in 2023. According to BDO, the growth can be attributed to the stronger momentum brought about by its core intermediation and fee-based service businesses.

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BDO continues to expand its loan portfolio, with gross customer loans increasing by 13 percent across all market segments. Deposits rose at the same rate to P3.7 trillion.

Non-interest income, meanwhile, went up by 13 percent on the back of higher fee income and treasury gains, as well as the “continued recovery in life insurance premiums.” The annualized return on common equity—used to measure profitability—slightly improved to 15.8 percent from 14.3 percent quarter-on-quarter. The Sy family-led bank's total assets hit P4.7 trillion as of June 30.

“BDO’s robust business franchise and strong balance sheet place the bank in a suitable position to capitalize on emerging opportunities to sustain attractive long-term growth and profitability,” BDO said in a statement.

Bank of the Philippine Islands (BPI)

Another bank with double-digit growth is the Bank of the Philippine Islands (BPI). It recorded a net income of P30.6 billion, marking an expansion of 21.5 percent. This is said to have been fueled by higher revenues. The amount jumped by 23.8 percent to P81.2 billion year-on-year. BPI cited increases in its service fees, credit card charges, and bancassurance income as primary contributors to the overall improvement.

In terms of lending, the Ayala-led bank's loans amounted to P2 trillion, noting a “sustained” growth in all its portfolios, based on a stock exchange filing. At the forefront are personal loans, which saw an increase of 128.7 percent, followed by business banking (87.9 percent) and microfinance (67.2 percent). Deposits, on the other hand, stood at P2.5 trillion.

BPI ended the first semester with assets totaling P3.1 trillion, up by 15.8 percent from the same period last year. The bank earlier said its merger with the Gokongweis' Robinsons Bank, which took effect on January 1, led to significant gains in both its income and number of outstanding shares.

Metropolitan Bank & Trust Co. (Metrobank)

The demand for consumer loans likewise pushed the net income of Ty-led Metrobank up by 11.44 percent from April to June. This brought its profit for the first six months of 2024 to a record P23.61 billion from P20.9 billion.

“Our strong capital position and robust asset profile continued to support our expanding core businesses despite market challenges. Prospects of easing inflation driven by government efforts could further spur consumer demand,” Fabian Dee, president of Metrobank, said.

“We are firmly on track to meet our medium-term growth aspirations as we support various public and private sector initiatives that continue to drive economic growth,” he added.

Metrobank’s net interest income inched up by 13.87 percent to P29.27 billion in the second quarter amid higher earnings from loans and receivables, as well as investment securities.

Gross loans rose by almost 15 percent, with expansions in both commercial and consumer loans at 13.7 and 15.2 percent, respectively. As of June 30, Metrobank's consolidated assets climbed by 14.5 percent to P3.3 trillion, with total equity at P355.09 billion. 

UnionBank of the Philippines (UnionBank)

UnionBank booked an 8.3-percent increase in its revenue to P37.3 billion on the back of a growing consumer business. It also attributed the improvement to its “higher net interest margin and growing transaction fees.”

The bank's net interest income grew to P27.5 billion, with a margin considered one of the highest in the banking industry at 5.7 percent. Total loans and receivables reached P514.8 billion, with consumer lending making up more than half (59 percent) of the portfolio, almost three times higher than the average among banks.

“We continue to post strong [top-line] revenues,” UnionBank chief financial officer Manuel Lozano said. “Now that we have completed the integration of the acquired Citi consumer business, the [parent bank’s] expenses have naturally declined.”

UnionBank acquired United States-based Citi's consumer banking business in the Philippines in 2021. In March, it announced the completion of the migration of its systems, which led to a 2.4-percent improvement in its operating expenses year-on-year.

“As a result, our net income in the second quarter of the year is at P3.1 billion, which is up by more than [50 percent] from the P2 billion in the previous quarter,” said Lozano. “Our focus in higher margin consumer segment and continued expansion of our customer base will allow us to sustain this growth momentum in the years to come.”

UnionBank registered assets worth P1.1 trillion by the end of June.

China Banking Corporation (Chinabank)

With a six-percent year-on-year growth, Chinabank saw its net income expand to P11.4 billion, its highest-ever, in the first semester of 2024.

“The continued growth of our core lending and deposit-taking businesses, combined with stable asset credit quality and controlled operating costs, allowed us to register our highest first-half net income to date, solidifying our position as one of the top four banks in the country,” Chinabank president and CEO Romeo Uyan, Jr. said in a stock exchange disclosure.

Net interest income went up by 19 percent to P30.4 billion as an impact of elevated rates. Chinabank said the better performance of its lending business helped offset the increase in its interest expenses. 

Gross loans, on the other hand, grew by 10 percent to P817 billion, as consumer loans inched up by a quarter. All in all, Chinabank's assets were at P1.5 trillion, up by 12 percent.

“This solid financial performance, backed by strong capital and liquidity, reflects [Chinabank's] inherent financial strength, prudent risk management, and sharpened customer focus,” said Chinabank chief finance officer Patrick Cheng.