Philippine financial system expanded further in the first half of 2015 due to positive market sentiment that boosted bank incomes despite some structural changes here and abroad, data from the Bangko Sentral ng Pilipinas (BSP) showed. Philippine banking sector -- which makes up 80.8% of the local financial system -- saw its assets grow by 9% to Php11.2 trillion as of end-June as the firms saw double-digit growth in investment and loan portfolios, the central bank said.
“Despite the moderation in credit allocation particularly with the real estate sector, the BSP remains proactive in its surveillance and use of macroprudential tools to mitigate the buildup of systemic risks,” the central bank said in a statement yesterday.
“The Philippine financial system... remains in a position of strength in the first half of 2015 amid structural shifts in the global and domestic financial landscape,” the BSP said.
Net profit of Philippine banks grew to Php68.9 billion in the first half, up by 8.1% from the Php63.7 billion recorded in the comparable January-June period in 2014, marking a recovery from the decline seen the year prior.
Income from trading activities provided the biggest boost. “Trading income, in particular, registered a hefty growth of 35.9% on favorable market sentiment during the first semester of 2015,” the BSP said.
Loans grew to Php5.4 trillion for first semester, growing by 14.6% from last year’s Php4.7 trillion. Meanwhile, deposits logged a 9% growth rate to Php8.6 trillion, though slower than the 24.5% expansion in the previous year.
“Funding profile remained stable with retail and domestic-oriented deposit liabilities continue to be the main source of funds,” the BSP said, citing a “modest” growth in deposit liabilities of banks.
The slower growth in deposits was due to the entry of more alternative investment products, such as insurance variables, that offer “more competitive” interest rates than leaving the money in the banks, the regulator said.
Despite an increase in lending, banks were able to trim the share of bad debts to their total loan portfolio to 2.4% from 2.7% the year prior.
Meanwhile, lenders’ capital adequacy ratio -- which measures their cover against credit risks -- stood at 15.1% on a solo basis and at 16.1% on consolidated basis, well above the BSP’s 10% minimum requirement and the 8% international standard under the Basel 3 framework. Capitalization on a solo basis covers a bank’s head office and its branches, while the consolidated basis includes its subsidiaries.
Banks also expanded their services in the first semester, with 638 banks operating 9,890 branches in the country, up from the 9,456 branches in the same 2014 period.
More ventured into electronic banking, rising to 268 from the past year’s 245. These services include electronic wallet, cash/remittance products, Internet banking, phone banking, mobile banking and hybrid mobile/internet via BancNet-MegaLink switch banking.
“Notwithstanding the sustained positive performance of the financial system, the BSP continues to closely monitor potential pressure points. This is in line with the BSP’s objective of promoting greater financial stability,” the central bank yesterday said.
The Philippine banking system is the only industry out of 69 sovereigns rated by Moody’s Investors Service that carries a positive outlook. Last year was the third straight year since 2012 that the sector held that tag from the global debt watcher.
-- Business World
No comments:
Post a Comment