Higher interest expenses curbed BPI's growth in Q1

Net interest income fell from 13% to 9%.

Rising interest costs has tempered the growth of Bank of the Philippine Islands (BPI) as net interest income fell from 13% to 9% in Q1, according to Maybank Kim Eng Research.

Non-interest income also dropped 8% YoY due to lower trust income, trading gains and asset sales. Moreover, operating costs rose 12% YoY amidst higher manpower and leasing costs due to branch expansion of the bank’s microfinance unit, BanKo.

Nevertheless, the bank’s prudent fiscal approach has led to positive gains as loans grew 17.2% in FY17 from 15.5% with better loan growth at around 17% may still be expected in the coming months, according to analyst Katherine Tan.

Also read: BPI targets growing its SME and retail arm 

NPL ratio also remained stable at 1.3%. An upswing in the capital markets environment could also buoy earnings from the bank’s investment banking division.