Philippine banks experienced a downturn in profitability ratios in the first quarter compared to the same period in 2023, despite sustained income growth and manageable non-performing loans.
According to data from the Bangko Sentral ng Pilipinas (BSP), both return on assets (ROA) and return on equity (ROE) declined on a year-on-year basis.
ROA, a measure of net profit relative to average assets, dropped to 1.47 percent by the end of March from 1.52 percent a year earlier, as total assets grew 10.8 percent to P25.649 trillion.
Meanwhile, ROE, which indicates net profit as a percentage of average capital, fell to 12.15 percent compared to 12.60 percent a year ago, with total capital rising 12 percent to P3.123 trillion.
Despite the decline, these metrics underscored the resilience of Philippine banks amid ongoing expansion in assets, deposits, and profits, buoyed by stable capital, liquidity buffers, and adequate provisions for credit losses.
