BDO posts record income

MANILA, Philippines - BDO Unibank Inc., the main banking unit of the SM Group, posted a record P22.6 billion profit in 2013, up 56 percent from P14.5 billion in 2012 due to higher interest gains.

In a statement, BDO said the solid income performance was a result of increased earnings from its core businesses, along with notable trading gains.

Its primary commercial banking businesses sustained its robust growth, with net interest income growing 20 percent to P43.2 billion.

Customer loans expanded 19 percent, going over the P900-billion mark, while total deposits reached P1.3 trillion, an upsurge of 44 percent.

The bank said its continued branch expansion enabled it to keep cost of funds tempered, with low cost deposits growing over 20 percent.

In 2013, BDO opened a total 52 new branches nationwide, maintaining its stature as among the largest bank networks 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 remained as the largest Philippine bank in terms of total assets, loans, deposits, capital and trust funds under management last year.

Aside from BDO Unibank, the Sy-led SM Group also has equity exposure in BDO Private Bank and China Banking Corp. It recently acquired Citibank Savings Inc. with 10 branches nationwide.

Accompanying earnings from its lending and deposit taking activities, the bank also realized P12.8 billion in trading and foreign exchange gains.

Fee-based income continued to show steady improvement as it reached P15.5 billion, an increase of 15 percent.

Even as the bank maintained its expanding customer coverage around the country, operating expense remained manageable at P43.2 billion, growing 9.5 percent.

Asset quality continued to improve, with the bank’s non-performing loan (NPL) ratio falling to 1.6 from 2.8 percent the previous year.

However, the bank continued to adopt a conservative provisioning strategy by setting aside provisions amounting to P7 billion as a result of continued loan growth. Coverage ratio therefore currently stands at 171 percent.

After its $1-billion rights offering in 2012, the bank’s capital base currently stands at P164 billion, the largest in the industry as of end-2013.

Its capital adequacy ratio (CAR) and Tier 1 capital ratio are at 15.8 percent and 14.6 percent, respectively, ready for Basel III implementation that started last January.