Earnings of Philippine banks rose by 6.4 percent to P290 billion from January to September compared to last year's P273 billion, according to the Bangko Sentral ng Pilipinas (BSP).

Banks' operating income increased by 11.7 percent to P939 billion during the nine-month period from P840.6 billion in the same period last year.

The sector's net interest income rose by 14 percent to P767 billion from P672.5 billion as interest earnings went up by 18 percent to P1.11 trillion from P940.6 billion, while interest expenses grew by 28 percent to P343 billion from P267.6 billion.

Likewise, banks' non-interest earnings grew by 2.3 percent to P172 billion from P168 billion on higher profit from fees and commissions as well as trading income.

Profit from fees and commissions jumped by 12.6 percent to P118.6 billion from P105.3 billion, while trading income went up by 9.5 percent to P18.9 billion from P17.23 billion. Realized gains from foreign exchange transactions surged by 37.5 percent to P13.19 billion from P9.59 billion.

Lenders' non-interest expenses stood at P521.5 billion as of September, 10.8 percent higher than the P470.8 billion in the comparable year-ago period.

As borrowers struggle to keep up with rising costs on their loans due to a high interest rate environment, Philippine banks are allocating more provision for credit losses.

During the nine-month period, provision for bad debts rose by 27.8 percent to P85.74 billion from P67.08 billion in the same period last year, while the amount of soured loans written off surged to P2.29 billion, nearly five times higher than the P462.7 million a year ago.

For universal and commercial banks, their net income increased by seven percent to P271.7 billion in the first nine months from a year-ago level of P253.9 billion.

Sy-led BDO Unibank reported a 12-percent jump in net income to P60.6 billion from January to September, followed by Ayala-led Bank of the Philippine Islands with 24.3 percent to P48 billion, and Ty-led Metropolitan Bank and Trust Co. with a 12.4-percent increase to P35.7 billion.

Philippine banks also continued to book double-digit growth in assets, expanding by 11.4 percent to P26.73 trillion in September from P24 trillion in the same month last year.

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