The Bank of the Philippine Islands (BPI) reported a 0.4 percent decline in net income for the first half of 2026, with profits reaching P32.8 billion compared to P33.0 billion during the same period last year. The slight dip in earnings occurred despite double-digit revenue growth, as the lender significantly increased its reserves to account for expected credit losses.
Revenue Growth Offset by Rising Costs
BPI’s total revenues for the first half rose by 12.4 percent to P104.0 billion. This financial expansion was supported by a 12.5 percent increase in net interest income, bolstered by an 11.3 percent expansion in the average earning asset base and a five-basis-point widening of the net interest margin to 4.63 percent. Non-interest income also contributed to the bank’s performance, rising 12.1 percent to P24.0 billion. This segment was propelled by an 18 percent jump in fee income, driven by higher transaction volumes across investment banking, credit cards, insurance, and wealth management services. However, these gains were countered by a rise in operating expenses, which climbed 13.8 percent to P48.6 billion. The bank attributed these costs to higher spending on personnel, technology, and expenses related to growing business volumes, resulting in a cost-to-income ratio of 46.8 percent.
Strategic Provisions Amid Economic Outlook
The most significant impact on the bank’s bottom line was an 84 percent surge in provisions for loan losses, which reached P13.3 billion. BPI stated that it set aside these reserves in anticipation of potential credit losses, citing a “challenging operating environment” and “deteriorating macroeconomic conditions and outlook.” Despite the aggressive ramp-up in provisioning, the bank’s asset quality remained stable. The nonperforming loan (NPL) ratio remained unchanged from the previous quarter at 2.42 percent, while the NPL coverage ratio improved to 92.98 percent, providing a stronger cushion against potential defaults.
Portfolio Expansion and Capital Position
BPI’s balance sheet continued to grow during the first half of the year, with total assets increasing 9.6 percent to P3.7 trillion. The loan portfolio expanded by 12.4 percent to P2.7 trillion, reflecting sustained momentum across both institutional and consumer segments. Lending to institutional clients grew by 8.7 percent, while non-institutional lending saw a robust increase of 21.2 percent. This growth was led by the small and medium enterprise (SME) segment, which surged by 74.5 percent, alongside a 28.9 percent rise in credit card receivables and a 21.4 percent increase in personal loans. Deposits also saw growth, rising 9.2 percent to P2.8 trillion, resulting in a loan-to-deposit ratio of 93.6 percent. BPI maintained a solid capital position, with a Common Equity Tier 1 ratio of 14.0 percent and a capital adequacy ratio of 14.8 percent, both of which remain above regulatory requirements.
Digital Initiatives and Shareholder Returns
During the second quarter, BPI introduced policy changes to drive transaction volumes, becoming the first local lender to permanently waive InstaPay and PESONet fees for person-to-person interbank transfers. Additionally, the bank expanded its agency banking network to over 7,000 partner stores as of July 1, with more than 1,300 of those locations providing cash deposit and withdrawal services. The bank also prioritized shareholder returns, distributing a cash dividend of P2.58 per share in June, marking a 24 percent increase year-on-year. Following the earnings announcement on Thursday, BPI shares rose by P0.70, or 0.68 percent, to close at P104.20 per share.
Key Financial Metrics (First Half 2026)
| Metric | Result | | :— | :— | | Net Income | P32.8 Billion | | Total Revenues | P104.0 Billion | | Total Loans | P2.7 Trillion | | Total Deposits | P2.8 Trillion | | Total Assets | P3.7 Trillion | | NPL Ratio | 2.42% | | Cost-to-Income Ratio | 46.8% |
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