Looking ahead, BDO, the banking arm of the SM Group of retail tycoon Henry Sy, said the profit growth could likely be matched this year.
"The bank will sustain the same performance, the same momentum that was achieved last year," said Nestor Tan, BDO president, in an interview.
In line with its profit target, BDO plans to complete the integration of the 67 branches it acquired from the United Overseas Bank (UOB) last year.
"Among our priorities this year is to integrate and deploy all the branches acquired from the UOB deal," Tan added. BDO presently has 184 branches and 327 ATMs nationwide.
Last year, BDO acquired the branch network of UOB for which in exchange, the Singapore-based mother unit United Overseas Bank Ltd. (UOBL) will acquire common shares of BDO equivalent to a board seat in the bank.
BDO’s total resources as of end-2005 stood at nearly P233 billion, up 30 percent compared to 2004.
Deposits grew 24 percent to P158.96 billion while net loans expanded to P82.3 billion from corporate and consumer portfolios. Capital funds remained strong at P19.91 billion or a 17-percent mark-up in spite of the reclassification of outstanding redeemable preferred shares to bills payable.
Net interest income grew to P6.56 billion, up 32 percent from P4.96 billion the year before, due mainly to a 30-percent expansion in its balance sheet and higher margins.
Non-interest income grew 59 percent to P3.94 billion as securities trading and foreign exchange operations remained strong, complemented by fees derived from trust, loans, cash management and deposit services. Pre-provision operating profit amounted to P3.78 billion, representing a 41-percent growth year-on-year.
Provisioning for probable losses amounted to P1.13 billion for loans, investments, and other asset reserves. Non-performing loans (NPL) declined to P4.41 billion resulting in an NPL ratio of 4.3 percent, the best in the industry.
Return on average equity (ROE) stood at a healthy 13.8 percent while return on assets (ROA) was placed at 1.2 percent.
In end-2004, BDO was ranked the eighth largest bank in the country in terms of resources and deposits, and seventh in terms of capital resources.
Early this year, it made a share-swap offer to Equitable PCI Bank, the country’s third biggest lender, that could eventually lead to a merger of the two financial institutions. The SM Group is the single biggest stockholder in Equitable PCI.