BBS Bank has reported a P17.5 million loss after tax for the half-year ended 30 June 2025, weighed down by a one-off P19.4 million impairment on its long-delayed headquarters development project.
The impairment relates to design and compliance setbacks on the project, first initiated in 2018 but stalled by the COVID-19 pandemic and funding constraints. New planning regulations rendered the original designs non-compliant, forcing the bank to write down the capitalised costs. Without this adjustment, management said the bank would have posted a profit of P2 million.
Despite the setback, net interest income rose 12% to P106.6 million, supported by a 13% increase in interest income to P265.3 million. However, higher funding costs drove interest expense up 14% to P158.7 million, squeezing margins.
Credit risk also weighed on performance. Provisions for expected credit losses surged nearly 30% to P104.7 million, with a charge of P23.6 million booked for the period, mainly from deteriorating unsecured loans.
On the upside, non-interest income jumped 31% to P18.4 million, while customer deposits held steady at P4.45 billion. Total assets eased slightly to P5.5 billion from P5.55 billion in December 2024.
The bank maintained a strong capital adequacy ratio of 22.2%, well above the 12.5% regulatory minimum, supported by new Tier 2 capital raising. Its liquidity ratio stood at 13.6%, also above threshold.
The bank said it remains focused on expanding digital banking, strengthening business banking, and rolling out prepaid and credit card products, alongside a potential agency banking model to deepen financial inclusion.
While acknowledging the hit from the impairment, the board emphasised that the decision reflects prudent financial reporting and risk management.