Philippine big banks’ Q2 asset growth fastest in nearly 2 years

By Pierce Oel A. Montalvo, Researcher

THE COMBINED ASSETS of the Philippines’ biggest banks grew at the fastest pace in nearly two years in the second quarter, despite uncertainty stemming from the Middle East war.

In the latest edition of BusinessWorld’s quarterly banking report, the aggregate assets of 44 universal and commercial banks rose by 10.23% year on year to P30.16 trillion in the April-to-June period, from P27.37 trillion a year earlier.

This pace was faster than the 9.52% rise in the first quarter of 2026 and the 9.05% growth in the second quarter of 2025.

This was also the fastest asset growth in nearly two years, or since the 11.17% increase in the third quarter of 2024.

Total loans jumped by 10.63% year on year to P15.93 trillion in the second quarter, faster than the 9.05% growth a year ago. On a quarterly basis, loans inched up by 1.9%.

However, loan growth was the slowest in two quarters or since the 10.12% in the fourth quarter of 2025.

Asset and lending growth continued in the second quarter despite slowing economic activity and elevated inflation.

In the second quarter, gross domestic product expanded by 2.3% — a new post-pandemic low, bringing first-half growth to 2.6%. This is below the government’s 3.5%-4.5% growth target for the year.

Inflation eased to a three-month low of 6.4% in June, bringing the six-month average to 4.8%.

The big banks’ gross nonperforming loan ratio stood at 3.3% during the second quarter, lower than the 3.32% print in the first quarter and the 3.39% during the same quarter a year ago.

Loans are considered nonperforming if the principal and/or interest are unpaid for more than 90 days from the contractual due date. These may pose risk to the lenders’ asset quality as borrowers are likely to default on these debts.

Meanwhile, the banks’ median return on equity (RoE) rose to 7.76% in the second quarter from 7.34% in the first quarter.

RoE is an indicator of profitability which measures the amount shareholders make on every peso they invest in a company.

On the other hand, the largest banks’ median capital adequacy ratio — which reflects the lender’s ability to absorb losses from risk-weighted assets — stood at 19.01% in the second quarter,. This was lower than the 19.08% in the first quarter and the 19.18% in the second quarter of 2025.

The ratio was above the regulatory minimum of 10% set by the BSP as well as the international minimum standard of 8% under the Basel III framework.

As of end-June, the big banks’ leverage ratio stood at a median of 10.92%, lower than the 11.15% in the first quarter of 2026, and the 11.39% in the second quarter of 2025.

The leverage ratio, which gauges the institution’s ability to absorb shocks by measuring the bank’s capital relative to total exposure, reached a median of 10.92% as of end-June.

The current figure exceeded the central bank’s 5% guideline as well as the international standard of 3%.

Meanwhile, the net interest margin (NIM) of these big banks stood at 3.69%, higher than the 3.57% a year earlier.

NIMs are an indicator of banks’ investing efficiency by dividing annualized net interest income by average earning assets.

Return on assets, which measures the profit generated per peso of an asset, dipped to 1.61% in the April-to-June period from 1.62% a year ago.

In the second quarter, BDO Unibank, Inc. (BDO) remained the largest bank in terms of total assets with P5.91 trillion, followed by Metropolitan Bank & Trust Co. (Metrobank) with P3.98 trillion and Bank of the Philippine Islands (BPI) with P3.74 trillion.

The Sy-led bank was also the biggest lender with P3.91 trillion worth of loans issued, followed by BPI with P2.65 trillion and Metrobank with P2.08 trillion.

BDO also posted the largest total deposits with P4.56 trillion, followed by Land Bank of the Philippines with P3.05 trillion and BPI with P2.85 trillion.

Among banks with at least P100 billion assets, Philippine Veterans Bank posted the fastest year-on-year asset growth at 42.31%, followed by MUFG Bank Ltd. (41.82%) and Mizuho Bank Ltd. (34.23%).   

On the other hand, JPMorgan Chase Bank N.A. was the most aggressive lender with a year-on-year growth of 120.64%, followed by Mizuho Bank Ltd. (91.29%) and Standard Chartered Bank (54.5%).

BusinessWorld Research has been tracking the financial performance of the country’s large banks quarterly since the late 1980s using banks’ published statements.