Philippines' BPI pops the champagne on 28% loan growth

However, weak trading has been observed.

Philippine-based BPI's lending activities has performed strongly as it expanded 28% YoY to PHP702b.

According to a research note from Maybank Kim Eng, this was funded by a 17% YoY increase in deposits, with a better CASA ratio of 76.5% in 3Q14 from 72.7% last quarter.

Its loan-to-deposit ratio stands at 67%. Still, Maybank Kim Eng estimates some margin compression with net interest income growing only 15%.

Non-interest income fell 17% to PHP14.8b as trading and forex gains declined 64% to PHP2.3b, representing 59% of our FY forecast.

Here's more from Maybank Kim Eng:

In 3Q14, net income rose 28% YoY and 8% QoQ to PHP4.8b due to a 15% YoY rise in net interest income and 31% increase in non-interest income.

Trading and forex gains jumped 34% in 3Q14 but were 57% lower than the previous quarter.

Operating expenses climbed 18%, in line with expectation on the bank's investment in technology and manpower expansion. Manpower increased 12% YoY to 14,336 in 3Q14 from 12,750 in 3Q13.

Gross NPL ratio improved to 1.8% from 2.1% a year ago. NPL cover stood at 107%. CET1 was reported at 14.9% with CAR of 15.7%, better than minimum requirements of 8.5% and 10%.