Two years after Bank of the Philippine Islands absorbed Robinsons Bank, the 2025 annual report shows a bank that is bigger, broader, and more lucrative — but also one carrying more credit risk, thinner buffers, and a more demanding balancing act.
The deal that turned the Gokongwei group into a roughly 6% shareholder in Bank of the Philippine Islands was sold in 2022 as a way to expand BPI’s customer base, deposit franchise, and product reach, while opening the Ayala-led lender to a new corporate ecosystem spanning retail, property, food, and aviation. The merger formally took effect on January 1, 2024, after regulatory approvals, with BPI as the surviving entity. Two annual cycles later, BPI’s 2025 Integrated Report and year-end earnings suggest that the broad strategic thesis has worked: the bank is larger, more visible, more digitally scaled, and paying bigger dividends. But the numbers also show the price of that expansion — higher bad-loan ratios, a much steeper provisioning bill, lower coverage, and less capital headroom than before Robinsons Bank was folded in.
Start with size, because size was the point. At the end of 2023, just before the merger became effective, BPI had ₱2.89 trillion in assets, ₱1.94 trillion in gross loans and ₱2.30 trillion in deposits. By the end of 2025, assets had risen to about ₱3.65 trillion to ₱3.7 trillion, loans to ₱2.6 trillion, and deposits to ₱2.84 trillion. The franchise is also simply more present: BPI reported 18.24 million clients, 1,318 branches and branch-lite units, 2,610 ATMs and CAMs, and 7,032 agency-banking partner stores by the end of 2025, up from 1,189 branches/international offices and 2,086 ATMs in 2023. In other words, the combination did not just bulk up the balance sheet; it widened the bank’s physical and digital reach into more corners of the Philippine economy.
The income statement tells a similar story. BPI’s net revenues climbed from ₱138.3 billion in 2023 to ₱170.1 billion in 2024 and then to ₱195.3 billion in 2025. Net income rose from ₱51.7 billion pre-close to ₱62.0 billion in 2024 and ₱66.62 billion in 2025. The bank’s ability to turn that broader footprint into shareholder cash also improved: cash dividends per share increased from ₱3.36 in 2023 to ₱3.96 in 2024 and ₱4.36 in 2025, while total cash dividends paid reached ₱23.0 billion last year. Even efficiency got better, with the cost-to-income ratio improving from 49.96% in 2023 to 49.25% in 2024 and 47.2% in 2025, a sign that BPI managed to grow revenue faster than expenses even while integrating a new platform and continuing to spend on technology and manpower.
That is the part of the post-merger story the Ayalas can sell easily. The harder part is that the new BPI is also a riskier-looking bank than the one that existed before Robinsons Bank became part of it. BPI’s non-performing loan ratio was 1.84% at end-2023. It rose to 2.13% in 2024 and 2.18% in 2025. Its NPL coverage ratio went the other way, falling from 156.08% in 2023 to 106.22% in 2024 and 94.9% in 2025. Most striking of all, provisions — the money set aside for expected loan losses — jumped from ₱4.0 billion in 2023 to ₱6.6 billion in 2024 and then surged to ₱17.8 billion in 2025. That last figure is the key reason BPI’s strong top-line momentum translated into only 7.4% earnings growth last year: the bank earned more, but it also had to reserve much more.
The capital picture has also become less comfortable, even if it remains well above regulatory minimums. Before the merger closed, BPI’s CET1 ratio stood at 15.29% and its capital adequacy ratio at 16.18%. By the end of 2024, those had slipped to 13.79% and 14.49%, respectively, and in 2025 the bank reported around 13.9% CET1 and 14.7% CAR. At the same time, the balance sheet is being worked harder: BPI’s net loans-to-deposit ratio rose from 82.0% in 2023 to 85.62% in 2024, while management reported a broader loan-to-deposit ratio of 92.4% in 2025. None of those levels implies immediate stress; all remain within the comfort zone for a large Philippine universal bank. But they do indicate that the merged BPI is operating with less surplus cushion than the pre-merger version.
To blame all of that on Robinsons Bank alone would be too simple. The merger accelerated a strategy BPI already wanted: a tilt toward higher-yielding consumer, SME, and business-banking loans. BPI said in 2024 that total loans grew 18.2%, including the book acquired from Robinsons Bank, but added that organic loan growth was still 13.0% excluding the acquired portfolio. In 2025, the faster growth came from non-institutional loans, which rose 25.8%, led by Business Banking, Credit Cards, and Personal Loans. That direction had been signaled before the transaction closed. When BPI shareholders approved the merger in early 2023, management said Robinsons Bank’s consumer-heavy mix fit BPI’s aspiration to lift consumer loans to 30% of its total loan book. The post-merger numbers show that pivot is happening — and the higher provisioning burden suggests the bank is now paying the normal price of moving deeper into higher-yielding retail credit.
There is also a useful irony in how modest Robinsons Bank’s contribution looks in isolation. In early 2025, BPI executives said Robinsons Bank contributed only around 6% of BPI’s assets and income, even as the bank worked toward full integration and rebranding of Robinsons branches. That helps explain why the merger’s strategic value is not best measured by how much Robinsons added on Day One. The real value is in what the combination allows BPI to become: a bank with a bigger customer funnel, stronger retail adjacency, deeper links to the Gokongwei ecosystem, and a wider opportunity to cross-sell cards, wealth, insurance, payments, and SME lending across an enlarged franchise. BPI’s own merger materials had framed the deal in precisely those terms — as a way to unlock synergies across products and expand the customer and deposit base of both banks.
So, has the merger made BPI better or worse? The fairest answer, as reflected in the 2025 annual report, is both. Better, because BPI is now bigger, more diversified, more productive, and more generous to shareholders than it was before Robinsons Bank was absorbed. Worse, because the bank is clearly less conservative than it used to be: bad-loan metrics are higher, reserve coverage is lower, provisions are dramatically larger, and capital buffers are not as thick as they once were. That is not a verdict of failure. It is the financial profile of a bank that chose growth, reach, and ecosystem advantage — and accepted that doing so would make the earnings stream a little less pristine. The Ayala-led lender appears to have won the scale battle. The next question, and the one investors will keep asking in 2026, is whether it can now prove that the extra risk was not just manageable, but worth it.
We’ve been blogging for free. If you enjoy our content, consider supporting us!
Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
Comments
Post a Comment