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Banks continue to improve in the third quarter of the year, according to stockbroker Colfinancial.com.
Colfinancial said most of the banks it monitors delivered results above expectations —
BDO Unibank Inc., Bank of the Philippine Islands (BPI), EastWest Banking Corp. (EW), Security Bank Corp., and Union Bank of the Philippines.
Colfinancial.com. said the banks’ surprise performance was driven by higher-than-expected non-interest income while others lower-than-expected provisions, while EastWest reported a stronger-than-expected net interest income.
Colfinancial said the banking sector’s net interest income as a whole grew 20 percent in the third quarter driven by expansion of the bank’s loan books and net interest margins.
“This was also boosted by growth in the banks’ investment securities portfolios. Overall, majority of the banks fell in line with our forecast,” it said.
Loan growth improved sequentially while net interest margins expanded with median loan growth up 12.4 percent compared to the second quarter’s 10.2 percent.
“We expect sustained loan growth as the economy continues to recover and consumer spending picks up towards the end of the year,” the stockbroker said.
Banks’ median net interest margin meanwhile grew to 3.91 percent.
Banks’ provisions for soured loans meanwhile increased by 25.8 percent.
Non-performing loans as a portion of total loans meanwhile dropped to 2.2 percent compared to 2.8 percent in the previous quarter.
“We believe that the sector NPL coverage ratio also remains adequate at 152 percent, improving further from 100 percent in the second quarter,” it said.
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