BDO sees income nearly tripling to P5.5 billion this year

MANILA, Philippines – Banco de Oro Unibank Inc. (BDO) is projecting its income to nearly triple to P5.5 billion from the P2.1-billion earnings recorded in 2008, the bank’s top executive said.

In a press briefing yesterday, BDO president Nestor V. Tan said the positive outlook is based on the continued growth of loans and deposits despite the poor economic conditions.

“BDO continued to post solid gains in the first quarter of 2009. The robust and sustained growth in loans, deposits, net interest income, fee-based income, and trading gains resulted in a net profit of P1.01 billion. This translates to a 62 percent hike from the P622 million net profit the bank posted in the fourth quarter of 2008, and is 45 percent higher over the recurring income BDO registered in the first quarter of 2008,” Tan added.

Tan said that the anticipated slowdown has forced the bank to set aside a 100-percent loan loss provision to protect the bank from defaults. Provisions were set at a little over P5.2 bllion.

However, he said projected net interest income is targeted to grow 38 percent to P32.7 billion from P23 billion in 2008, while non-interest income is seen to remain steady at roughly P13.6 billion.

“Fee-based (income) has always been strong and steady, as we will sustain improvements in services and products,” Tan said. With the size of its loan portfolio, BDO must also be extremely cautious of the asset quality and the potential delinquencies.

On its outlook for 2009, BDO chairperson Teresita Sy-Coson remained upbeat. “While the economic environment remains challenging, the bank is expecting both revenue and income growth. BDO will leverage on its established business franchises and expanded scale and scope to operate from a position of strength. This will also position the bank to capitalize on market opportunities as they arise.”

Total resources are seen to expand further to P950 billion, or 19 percent higher than the P802 billion the previous year.

In 2008, BDO catapulted to become the country’s largest bank in terms of resources, deposits and customer loans.

The commercial bank of the SM Group of Companies has been recording double-digit growth in most of its banking activities. Loans grew by 32 percent, deposits 43 percent, credit cards 11 percent, trust funds 23 percent, insurance premiums 23 percent and transaction banking income 30 percent.

BDO has one overseas branch in Hong Kong, 20 remittance offices and over 200 tie-ups and correspondent banks and 336 designated agents, worldwide.

Recently, it acquired GE Money Bank as it sought to expand its consumer and retail base.

BDO has 664 operating branches nationwide with 34 more for redeployment within the year. It maintains 1,253 automated teller machine (ATMs), the second largest among commercial banks.

“We are now a major player in all the business lines offered by most banks,” Tan added.