Bangko Sentral: PHL banks earn P83B in 2010

Universal and commercial banks made P83.36 billion in net profits last year, up nearly a third from P63.72 billion 2009, helped by interest and non-interest incomes, the Bangko Sentral ng Pilipinas (BSP) said Wednesday. Interest income largely refers to earnings on cash temporarily held in savings accounts, certificates of deposits, and other investments, while non-interest income is derived from service and penalty charges. The BSP said interest income increased to P183.98 billion from P172.88 billion, while non-interest income climbed to P116.98 billion from P94 billion. However, banks' combined foreign exchange losses amounted to P5.87 billion, a turnaround from P14.13 billion in gains in 2009, Bangko Sentral data showed. "This was due to the continued strengthening of the peso against the US dollar," the BSP said in a statement. The peso strengthened by 5.3 percent to 43.885:$1 last year from 46.356:$1 in the same comparable period. Sound, stable banking system BSP Gov. Amando Tetangco Jr. said the country's banking industry has remained sound and stable. "Continuing reforms have sustained the banking system's soundness and stability… Banks' balance sheets have been strengthening." Bank lending continues to rise between 10 percent and 11 percent per year while the country’s domestic liquidity or M3 is expanding 10 percent annually, the central bank chief said. The non-performing loans ratio of banks remained low at 3 percent, compared to the pre-1997 financial crisis level of 4 percent, Tetangco said. Their capital adequacy ratio ranged from 15 percent to 16 percent, against the central bank minimum requirement of 10 percent, he also said. Monetary authorities considered 2010 a banner year for Philippine banks as the country achieved a stronger-than-expected economic growth, noting that the industry grew healthy in terms of lending, deposits, and profitability. — JE/VS, GMA News