BANK OF COMMERCE (BankCom) saw its net income decline by 25.74% in the second quarter due to higher expenses.
The San Miguel Corp.-led bank booked a net profit of P649.3 million in the April-to-June period, down from P874.35 million a year prior, its financial statement showed.
This brought its first-half net income to P1.42 billion, down by 10.63% from P1.59 billion a year ago.
This translated to a return on average assets of 1.23% and a return on average equity of 9.12%.
Net interest income went up by 12.91% to P2.28 billion in the second quarter from P2.02 billion a year ago.
Net interest margin was at 4.53% at end-June, up from 4.35% a year ago.
BankCom’s non-interest income amounted to P300.03 million, dropping by 46% from P560.21 million a year prior, amid a decline in income from service charges, fees and commissions and bigger trading losses.
Meanwhile, operating expenses increased by 22.74% to P1.72 billion from P1.4 billion as the bank ramped up its provisioning for credit losses by 163.13% to P73.17 million in the quarter.
This resulted in a cost-to-income ratio of 0.62%, up from 0.56% a year ago.
BankCom’s total loans expanded by 12.91% to P123.71 billion at end-June from P109.57 billion at end-2023, driven by higher corporate and consumer loans.
Its gross nonperforming loan (NPL) ratio was at 1.7% at end-June, up from 1.54% at end-2023, while its net NPL ratio stood at 0.53%, rising from 0.44%. NPL cover was at 88.02%, down from 93.21%.
On the funding side, total deposits declined by 4.58% to P177.39 billion from P185.91 billion amid higher costs and volatility in its current account, savings account (CASA) levels due to the high interest rate environment.
“Broken down, total deposits comprised of P155.20 billion CASA, P17.16 billion time deposits and P5.03 billion long-term negotiable certificate,” the bank said.
This resulted in a loan-to-deposit ratio of 75% as of June, up from 70% at end-2023.
BankCom’s total assets inched down by 0.43% to P230.68 billion at end-June from P231.67 billion at end-2023.
Total equity also dropped by 1.57% to P31.34 billion from P30.85 billion.
BankCom’s capital adequacy ratio was at 17.97%, down from 19.88% at end-2023 but still above the 10% regulatory minimum.
Its shares went down by 20 centavos or 2.82% to end at P6.90 apiece on Thursday. — A.M.C. Sy
