BDO net earnings jump 19% to P7.6B in Jan-Sept

MANILA, Philippines - Banco de Oro Unibank Inc. (BDO) registered a 19-percent increase in net income in the first nine months of 2011 to P7.6 billion from P6.4 billion in the same period last year.

The main commercial bank of the SM Group of Companies reported a whopping 46-percent increase in net income to a record P8.8 billion in 2010.

“A balanced increase in most banking services were reported in the nine-month period, despite the difficult operating environment here and overseas,” the bank said in a statement.

Gross customer loans grew 24 percent to P620.8 billion compared to a 19-percent growth rate for the industry. “All market segments registered good growth compared to last year,” BDO said.

Total deposits increased 15 percent to P820.6 billion, buoyed by low-cost deposits generated from an expanded branch network. System liquidity however, continued to compress asset yields, while net interest income improved slightly to P25.7 billion.

Recurring fee-based income from service businesses, such as asset and wealth management, payments and electronic banking, insurance and capital markets, rose 17 percent to P8.8 billion.

Securities trading and foreign exchange gains improved 16 percent to P5.1 billion.

Thus, non-interest income, including other miscellaneous income, went up 16 percent to P15.3 billion.

Asset quality improved with the gross non-performing loan (NPL) ratio dipping to 3.9 percent from 4.7 percent as of yearend 2010. The bank has set aside P5.1 billion for provisioning against possible losses, thus bringing its NPL coverage ratio to 108 percent.

Capital adequacy ratio (CAR) rose to 15 percent following a P8.5-billion Tier 2 issue in June. It issued an additional P6.5 billion worth of Tier 2 notes last month to further supplement its capital position and complete its P15-billion capital raising program.

The interim results led to enhanced shareholder returns, with an annualized return on common equity of 11.8 percent.

BDO operates 740 branches and more than 1,500 ATMs nationwide. It is also a leader in the remittance business among the country’s commercial banks.

Recently, it was classified as the largest bank in the Philippines, based on a report released by The Asian Banker, one of the region’s prestigious financial publications. It was ranked 186th among the top 500 banks in the Asia Pacific region.