BBS Bank reported a loss of P113.3 million for the year ended December 2025, reversing from a P38.1 million profit in the prior year, as rising funding costs and a sharp increase in credit impairments weighed heavily on performance.
The bank’s net interest income fell 31.5% to P144 million, despite a 16% increase in interest income to P556 million, as interest expenses surged 53% amid intense competition for deposits and tightening market liquidity. This margin compression was the primary driver of the loss.
Credit impairments more than tripled to P77.5 million, reflecting deteriorating asset quality in a challenging economic environment, while additional non-recurring impairments—including costs related to its head office project—further dragged earnings. Total expenses rose 16% to P219.1 million, driven by continued investment in infrastructure, technology and human capital.
Non-interest income provided limited support, with fee income rising modestly but overall other income falling sharply due to the absence of once-off gains recorded in the prior year.
The balance sheet remained relatively stable, with total assets holding at around P5.6 billion, while customer deposits grew slightly and loans remained flat as the bank prioritised asset quality over growth.
Asset quality deteriorated, with the non-performing loan ratio rising to 6.28% from 5.23%, while the cost-to-income ratio surged to 120.6%, reflecting weaker income and higher operating costs.
Despite the loss, capital adequacy remained strong at 19.7%, well above regulatory requirements, as the bank continued to build its balance sheet during its ongoing transformation into a full-service commercial bank.