Banks’ assets climb in the first semester

The total assets of the Philippine banking sector rose in the first half of the year compared with a year ago, reflecting the continued recovery of the economy from the impact of the coronavirus pandemic.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed banks’ assets rose by 9.03% to PHP 23.28 trillion as of end-June, from PHP 21.35 trillion in the same period a year ago.

Deposits, loans, and investments mainly support banks’ assets.

The banking industry’s total loans inclusive of interbank loans receivable (IBL) and reverse repurchase (RRP) reached PHP 12.29 trillion as of end-June, 8.6% higher than the PHP 11.31 trillion in the same period in 2022.

Net investments climbed by 9.7% to PHP 6.77 trillion from PHP 6.17 trillion a year ago. These are financial assets and equity investments in subsidiaries.

Cash and due from banks inched up by 0.7% to PHP 2.87 trillion in the first half of 2023 against the PHP 2.85 trillion last year.

Net real and other properties acquired (ROPA) also increased by 1.9% to PHP 101.58 billion from PHP 99.67 billion in the same period in 2022.

Other assets amounted to PHP 1.25 trillion, 36.5% higher than the PHP 916.63 billion last year.

Meanwhile, the total liabilities of the banking system grew by 8.7% to PHP 20.42 trillion in the first semester, from PHP 18.77 trillion in the comparable year-ago period.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the continued growth in banks’ assets and overall business reflect the continued reopening of the economy following the pandemic, even though bank lending slowed due to high prices and borrowing costs.

“Nevertheless, continued growth in overall business/revenues and earnings of banks would further bolster capitalization, amid improved asset quality in terms of relatively lower NPLs (nonperforming loans) amid the economic reopening narrative,” Mr. Ricafort said.

The banking industry recorded a higher net profit in the first half of the year amid increased net interest income and loan growth, separate BSP data showed.

The cumulative net income of the banking system grew by 24.7% to PHP 178.51 billion as of June from PHP 143.12 billion in the same period in 2022.

Meanwhile, the gross NPL ratio of the Philippine banking industry slid to 3.42% in June, from 3.46% in May and 3.6% a year ago. It was the lowest since 3.41% in April. — Keisha B. Ta-asan