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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 P23.28 trillion as of end-June, from P21.35 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 P12.29 trillion as of end-June, 8.6% higher than the P11.31 trillion in the same period in 2022.

Net investments climbed by 9.7% to P6.77 trillion from P6.17 trillion a year ago. These are financial assets and equity investments in subsidiaries.

Cash and due from banks inched up by 0.7% to P2.87 trillion in the first half of 2023 against the P2.85 trillion last year.

Net real and other properties acquired (ROPA) also increased by 1.9% to P101.58 billion from P99.67 billion in the same period in 2022.

Other assets amounted to P1.25 trillion, 36.5% higher than the P916.63 billion last year.

Meanwhile, the total liabilities of the banking system grew by 8.7% to P20.42 trillion in the first semester, from P18.77 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 P178.51 billion as of June from P143.12 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

Neil Banzuelo

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