BDO profit surges 73% to P18.2 B

MANILA, Philippines - BDO Unibank Inc., the main banking unit of the SM Group, posted a 73 percent increase in its net income in the first nine months of the year to P18.2 billion, from P10.5 billion in the same period last year.

In a statement, BDO president Nestor V. Tan said the surge in income was driven by loan growth and improved deposits level.

“Our core businesses continued to deliver very good numbers despite pressures from excess system liquidity and capital market volatility,” he said.

Gross customer loans increased 17 percent to P846.4 billion on broad-based expansion across key markets.

Total deposits accelerated 40 percent to P1.2 trillion, led by the steady growth in low-cost deposits as well as the inflow of maturing special deposit accounts (SDA) from the Bangko Sentral ng Pilipinas (BSP). The central bank has been gradually phasing out the SDA facility since July and will be closed to individual placements by end-November.

The growth in both loans and deposits contributed to a 16 percent hike in net interest income to P31 billion.

Non-interest income rose 36 percent to P25.8 billion on the double-digit expansion in both fee-based income and trading and foreign exchange gains. Growth in operating expense, meanwhile, remained steady at eight percent.

The bank’s gross non-performing loan (NPL) ratio fell to 2.4 percent by end-September 2013.

Reflective of its conservative provisioning stance, the bank also set aside provisions of P5.1 billion to lift its NPL coverage ratio to 152 percent.

As of end-September, BDO’s capital adequacy ratio (CAR) and Tier 1 capital ratio of 17.1 percent and 15.3 percent, respectively, remained well above the regulatory minimum, and comfortably exceeding the Basel III requirements set for implementation in January 2014.

With the steady earnings’ growth, BDO’s top executive said the bank  would likely meet its targets this year.

“We are on track and very optimistic of hitting our P20.4 billion guidance for 2013,” Tan said.

BDO, a full-service universal bank which provides a wide range of corporate and retail banking services,  has one of the largest distribution networks in the country, with more than 790 operating branches and over 2,100 ATMs.

It also has a branch in Hong Kong as well as 13 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.

BDO ranked as the Philippines’ largest bank in terms of total assets, loans, deposits, capital and trust funds under management as of the first half of 2013.