Bank of the Philippine Islands (BPI) investor relations material

Executive summary

• Net income for Q1 2026 reached PHP 16.92 billion, up 1.7% year-on-year and 4.9% sequentially, driven by strong revenue and loan growth, wider net interest margins, and stronger fee-based income, despite higher operating expenses and provisions.

• Return on equity stood at 14.3% and return on assets at 1.9%, reflecting sustained profitability.

• Digitalization, AI integration, and agency banking initiatives continued to expand, enhancing customer reach and operational efficiency, with the customer base growing to 18.7 million.

• Asset quality saw pressure, with NPL ratio rising to 2.42% due to select institutional accounts and a shift toward non-institutional loans, but coverage remains supported by collateral.

Financial highlights

• Total revenues rose 13.9% year-on-year to PHP 50.92 billion, with net interest income up 13.7% and non-interest income up 14.5%.

• Operating expenses grew 15.8% year-on-year to PHP 23.5 billion, mainly due to technology, manpower, and regulatory changes.

• Provisions for the quarter were PHP 5.5 billion, up 83.3% year-on-year.

• Cost-to-income ratio improved to 46.2%.

• Total assets reached PHP 3.7 trillion, up 13% year-on-year.

Outlook and guidance

• Loan growth guidance revised to 10-12% for 2026, down from earlier expectations due to economic headwinds.

• Provisioning expected to remain elevated, potentially in the 90-100 basis points range, depending on macroeconomic developments.

• OPEX growth for 2026 projected around 10%, with flexibility to adjust spending as needed.

• Continued focus on digitalization, AI, and agency banking to drive scalable growth and strengthen the customer franchise.

• NPL ratio expected to remain stable or decline by year-end as recoveries materialize.