INVESTMENT houses and financing companies were able to turn around from losses early in the pandemic, as they reported net profits in the first six months of the year.
Data from the Bangko Sentral ng Pilipinas (BSP) show that nonbanks with quasi banking (NBQBF) functions—largely comprised of investment houses and financing companies in the country—incurred a net profit of P625 billion in end-June this year.
This is a turnaround from March’s net losses of P195 billion.
Overall, these financial institutions were able to expand their total income during the period, thereby offsetting the larger operating expenses seen.
The operating income of NBQBFs hit P3.87 billion in end-June this year, up from March’s P1.6 billion. This more than offset the larger operating expenses of the industry during the period, which was at P2.98 billion. Their operating expenses in the previous quarter were at P1.63 billion.
Broken down, these financial institutions’ income came largely from net interest expenses at P3.43 billion during the month, while non-interest income only contributed P448 million for the quarter’s income.
For its expenses, bulk was from overhead costs at P1.89 billion.
NBQBFs also had more bad debts written off for the period. For end-March, the total bad debts written off by these financial institutions hit P122 million. This almost doubled by end-June at P206 million.
They also increased their provisioning for the period, from P264 million in March to P485 million in end-June.
Financing companies mostly drove the growth in the sector’s overall income during the period, comprising about 92 percent of the sector’s total income.
Image credits: Nonie Reyes