Steady growth in assets and deposits boosted the banking sector’s third quarter net profits to P114.78 billion, up 16.68 percent from the same period last year of P98.7 billion.

Data from the Bangko Sentral ng Pilipinas (BSP), updated this week, showed that during the period, the industry’s total operating income went up by 10.74 percent year-on-year to P393.15 billion from P354.99 billion.

As of end-September, banks’ net interest income increased by 10.84 percent to P283.3 billion from P255.66 billion the same period in 2015.

Non-interest income also rose by 10.59 percent year-on-year to P109.85 billion from P99.33 billion while non-interest expense amounted to P251.55 billion or 10.33 percent higher from last year’s P227.99 billion.
There are 618 banking head offices supervised and monitored by the BSP as of end-June this year. The industry is 90 percent dominated by 41 big banks or financial institutions with universal and commercial banking licenses. Thrift banks total 64 and there are 513 rural and cooperative banks in operation.

Core banking operations such as lending and deposits have remained strong in the third quarter based on reports, and this was supported by sustained economic growth.

Moody’s Investors Service in a recent report said they are keeping a stable outlook for the local banking system for another 12-18 months on “robust fundamentals of the system, and the country’s macroeconomic stability.”

The credit watchdog has been maintaining the same assessment since November 2015.
“Asset quality will remain broadly stable, supported by stable macroeconomic factors, and the stable debt servicing metrics of borrowers,” said Moody’s, adding that domestic liquidity will continue to support funding requirements.

With the current operating environment, Moody’s sees local banks’ stable space as continuing to support credit growth. It estimates a growth of 6.5 percent for the Philippines this year and in 2017.

“Strong domestic consumption and an increased pace of investments, backed by macroeconomic stability, underpin the robust growth expectations,” the report said. “Business sentiment remains strong, banking sector credit growth will stay robust, and the economy has demonstrated resilience to global shocks.”

“However, the country’s growth prospects could be undermined, if there is a significant shift in the government’s policies,” it added.

Source: http://business.mb.com.ph/2016/11/13/banks-net-profits-up-16-68/