On the major earning assets, loans grew by 7.5%. The other major earning asset is the securities book, which is up 25%. Whatever excess funds we have, we continue to deploy in the securities portfolio, and it's an opportune time also to build up as interest rates have more or less stayed at these current high levels. On the funding side, deposits were up 12%. CASA has remained flattish so far. At least we're not seeing a further migration out of CASA into time deposits. We're more or less holding just under the PHP 2.5 trillion level in terms of total CASA. Book value per share, as mentioned earlier, because of our profitable operations and also some improvement in the mark-to-market of our portfolio, we've seen a 13% improvement in book value.
On the P&L side, main contributors, NII is still strong, growing at 27%, and this is from a combination of improved margins and growth in the earning asset base. Fee income continues to be steady at the teens, low- teens levels, and also this is a function of our continuing coverage of new markets, the sustainability of our service businesses. We hope that this is something that we can continue with over time. Next. PPOP is up 28%. Next. Return on equity at 15.1, more or less the same level as it was from the June ROE. NIMS at 4.65%, likewise steady from the June number, as we saw just a minimal improvement in margins quarter-on-quarter. NPL, as mentioned earlier, we're under 2%, so stable at that level, even as we've seen a more pronounced uptick in the system NPL numbers.
Our coverage has risen further to 176. CET1 at 14, again, this is a result of profitable operations and also the shift to the new standardized approach for operating this. Now, in terms of the third quarter highlights. PHP 18.7 billion, again, this is still a record-high gross operating income, PPOP, and net income for BDO for one quarter. The ROE, more or less as mentioned earlier, being maintained at the mid-teens. Our third quarter NIMS in particular was up 51 basis year-on-year, and one basis point quarter-on-quarter, so from 4.74%- 4.75%. Now, for the nine-month performance, almost PHP 54 billion in net income, 35% higher than last year. Next. NII, already highlighted earlier at 27 growth from a combination of loan growth and margin improvement. For fee income, double-digit growth maintained. Next.
For treasury, we saw an improvement in their results despite the challenging environment. Again, this is a combination of client flows as well as, I guess, opportunistic trading by our treasury group, both on the fixed income and FX side. Operating expenses up 17% year-on-year. This is more or less the pace that we've been growing at since the first quarter of this year. I think we were growing anywhere from 16%-17% year-on-year since the first quarter. Again, the main drivers of that, as mentioned earlier, were the volume related and continued IT spending. PPOP, 28% up. Provisions lower by 12% as we were able to scale back a bit on the provisioning side given the stable performance of our asset quality indicators.
Yes, NPLs have ticked up a bit, again, we believe it's not a cause for concern at the moment. Still, we believe very manageable, and we continue to set aside more provisions in the process. Okay, next. On the balance sheet, loans up 7.5, securities up 25. Those are the two main earning assets for us. Next. On the funding side, mentioned earlier, deposits up 12%, but mostly in time. CASA levels are flattish year-over-year so far. Book value up 13%. On the loan book, this is the split that we have today. Consumer is up about 14.5, corporate up eight. Middle market has been still challenged so far, just with a 1% growth as of September.
We have seen effectively a bit of an acceleration in our loan growth in September as compared to June. If you recall, in June, our year-to-date growth was like 1%, year-to-date. As of September, our year-to-date growth is up to 4%. If you recall, our guidance for loan growth was 8%-10% on a full year basis. In terms of deposits, again, CASA is still steady, more or less at just under PHP 2.5 trillion. Cost of deposits at 1.28%. This is slightly higher than the June number, we think that this is still among the lowest in the industry. In terms of branch expansion, 55 branches opened so far, 52 from BDO Network Bank, three from BDO. Again, we mentioned earlier that there's continued focus on serving the underbanked, underserved areas, and that is reflected in the branch expansion of BDO NB.
For the non-interest income, the biggest component would be fee-based, accounting for about 60%. Second component would be insurance premiums. In terms of fees, as shown on the right-hand chart, there's been a steady double-digit growth in fees. If you look at insurance premiums, again, similar to the trend that we saw in previous quarters, total premiums recorded is down year-over-year by low single- digit. If we look at traditional premiums year-over-year, we've maintained a 20%+ growth in traditional protection premiums. For the securities book, again, with the continued buildup, it's now equivalent to 21% of our balance sheet. We think more or less at this level, we're quite comfortable between the mix of our loans and our securities portfolio. Cost-income ratio, stable at 58%, operating expenses, as mentioned earlier, 17% growth year-over-year. Next.
Asset quality, we've highlighted. If you look at the quarterly sequential trend, about four basis point uptick during the quarter. In terms of PPOP, about almost PHP 81 billion for the nine months. If you compare that to 2022, our full year number was almost PHP 90 billion. Again, we're well on track to exceed the previous year's numbers. Next. Net income, again, PHP 54 billion, nine months. It's against PHP 57 billion last year. Again, we're poised to exceed the full year numbers last year. Next. Capital ratios, parent at 14% consolidated at 14.4% CET1. In terms of dividends, so we've increased our cash dividends to PHP 3 this year from PHP 1.20 historically. Drivers for medium-term growth for us, I think we've discussed these historically. Financial inclusion is through BDO Network in the underserved areas.
Life insurance through BDO Life, again, capitalizing on the branch network of BDO to sell traditional protection to our clients. Wealth management, we have created platforms across all segments so that we're able to cover the entire spectrum of our client base, from high-net-worth individuals to the mass affluent to the emerging affluent. That allows us, again, to provide access to wealth management capabilities for all our clients. Lastly, on the digital investments, again, this is an ongoing process and we think that over the medium term, these investments in digital capability will help translate into better operational efficiencies and ultimately help improve the bottom line. For the macro outlook, can I ask Dante to just give us a brief overview?
Hello, everyone. Just next slide, please. As usual, just a quick macro update. There, again, are just three things or three trends we monitor: economic activity, inflation and rates, and then any external catalysts we believe the bank should be on the lookout for. In terms of economic activity, the headwinds to growth that we saw in first half of this year, we think should still be there in the near term. This would be government spending constrained by limited fiscal space, investment spending slowed by elevated interest rates. We do expect some recovery in government spending in second half of this year, but on an annualized basis, given the fiscal situation of the government, it's difficult to see government spending, the growth in government spending matching what we've seen the past five years.
With regards to household consumption, this has been relatively resilient as of first half. Nonetheless, we are monitoring this closely given that we're already more than a year away from easing of quarantine protocols, and some of the pent-up demand could already be waning. With regards to inflation and rates, I think the BSP is still maintaining its higher for longer, tighter for longer monetary policy, especially with the off-cycle 25-basis point hike we saw two weeks ago. I think the BSP is still worried about elevated inflation expectations. Internally, Corplan Research is more aligned with what NEDA is seeing in terms of inflation risk, that for the large part, outside of commodity price shocks, supply side issues, inflation risks are already behind us and slowing growth is more of a concern.
Especially since I think the October inflation print came out this morning, came in well below consensus expectations, well below the BSP guidance, and core inflation actually is continuing to slow. What to look out for? Two main things. One is supply-side commodity price shocks, especially with the uncertain geopolitical environment.
We're particularly focused on oil and rice prices, given that these are the bigger components of the CPI basket. These have d isproportionately larger implications on consumer purchasing power and also the inflation trends. The second would be possible collateral damage from elevated interest rate, especially if you have this combination of slowing growth and high interest rates.
In terms of our outlook on the intermediation side, I mentioned earlier we are maintaining our 8%-10% indicative range for loan growth. The year-to-date numbers show a 4% growth from end of 2022, and we hope that a strong kick in the fourth quarter will, again, help us at least reach the lower end of that range. It's still a fighting target for us. NIMS have been stable to improving. The recent rate hike by the BSP, again, provides upside to NIMS as we reprice our loans in the coming quarter. Fee income has been steady. Asset quality has been steady as well. On the digital initiatives, as mentioned earlier, we just continue with the deployment and implementation of our initiatives.
Hi, this is Richard Tan. I'll be moderating the Q&A. This question is from Melissa Kuang of Goldman Sachs. Question on credit costs. We have seen stabilization of your NPL ratio. How should we think about credit costs for the year? Is there any segment of loans we should be worried about in the higher interest rate and higher inflation environment?
Well, we're watching our portfolio, and we do periodic portfolio reviews for our clients. So far, it can be seen, I mentioned earlier about the NPL formation for BDO still coming primarily from consumer. Again, the levels of NPL formation are not yet at that point where it's considered alarming or of concern yet. We think it's still very manageable.
I think generally you should expect NPL ratios to go up because the growth is in consumer. Whether you like it or not, consumer has a higher NPL ratio than the other two. The change in NPL is not a deterioration of the book, it's a change in mix. Like for us, middle market is flattish, and that's normally a good risk. Consumer loans is high, up about mid-teens. You should expect an increase in NPLs and slight increase in credit costs, but not because of credit deterioration, but mostly change in mix.
Question also from Selvie of Morgan Stanley. Which segments within consumer lending has been driving growth?
It's been credit cards and mortgages. Auto loans have been, I think, more recently accelerating as well. Historically, I think auto loans was the slowest growing segment, but we've seen a pickup also in auto lending.
With that, we can adjourn the meeting. Again, thank you very much for joining us today.
Thank you.