The banking sector reported a combined net profit of P198.14 billion in the first six months of the year, a 4.14 percent increase from P190.26 billion during the same period in 2024.
The latest data from the Bangko Sentral ng Pilipinas (BSP) showed growth in the first half was primarily fueled by an expansion in loans, deposits and assets.
Net interest income, the difference between interest earned on loans and interest paid on deposits, climbed 11.69 percent to P564.98 billion from P505.82 billion a year earlier.
Non-interest income, which includes fee-based revenue, grew by 14.69 percent to P119.84 billion.
As a result, the industry’s total operating income rose 12.19 percent to P684.71 billion.
Despite the rise in income, banks’ non-interest expenses, which cover compensation and taxes, increased by 12.55 percent to P384.03 billion.
The sector also continued to set aside more funds for potential losses, as non-performing loans have not yet returned to pre-pandemic levels.
Provisions for credit losses surged 63.8 percent to P84.19 billion, and losses on financial assets were up 64 percent at P73.61 billion.
This trend reflects banks’ ongoing efforts to strengthen their balance sheets five years after the Covid-19 crisis, which saw a significant rise in bad loans.
Recoveries on charged-off assets, or previously written-off debts, increased by 67.55 percent to P13.33 billion.
The central bank anticipates that easing market conditions, including lower inflation and reduced interest rates, should help improve borrowers’ ability to repay their debts.
