BDO profit surges 49% in 9 months

MANILA, Philippines — Earnings of Sy-led BDO Unibank Inc. rose by 49 percent to P32.1 billion in the first nine months from P21.5 billion in the same period last year, driven largely by the expansion in the bank’s recurring core revenues.

The bank’s earnings from January to September almost already matched its record high net income of P32.7 billion in 2018.

The bank is projecting an 18 percent rise in profit to a record P38.5 billion for 2019.

“With its focused growth strategy, strong business franchise, solid balance sheet and extensive geographic reach, the bank remains solidly positioned to capitalize on the country’s solid economic pace and growth opportunities in underserved and emerging markets, BDO said in a statement.

In a disclosure to the Philippine Stock Exchange (PSE), BDO said its loan book increased by about six percent to P2.1 trillion in the first nine months from around P2 trillion in the same period last year, led by the sustained growth in the middle-market and consumer segments.

On the other hand, the bank’s deposit base inched up by three percent to P2.4 trillion from P2.3 trillion, with low-cost current account and savings account (CASA) deposits increasing by six percent and accounting for 72 percent of total deposits.

The bank said its net interest income grew by 23.8 percent to P88.5 billion from P71.5 billion, translating to a higher net interest margin.

Likewise, BDO’s non-interest income went up by 23.2 percent to P44.1 billion from P35.8 billion as fee-based income increased by 14 percent to P25.4 billion, while insurance premiums jumped 23 percent to P10.8 billion.

BDO’s trading and foreign exchange gains amounted to P690 million in the third quarter from P1 billion in the same quarter last year.

However for the first nine months, the trading and foreign exchange gains amounted to P4.3 billion, reflecting a normalized level compared to 2018, where a more volatile environment prevailed.

Overall, BDO’s gross operating income rose by 23.6 percent to P132.6 billion from January to September compared to a year-ago level of P107.3 billion.

The bank said its operating expenses grew by 20 percent to P85.8 billion from P71.7 billion given its continuing expansion as well as increased volume-related expenses such as taxes and licenses and policy reserves at BDO Life.

It said provisions amounted to P4.2 billion as the bank maintained its conservative credit and provisioning policies. Gross non-performing loan (NPL) ratio was steady at 1.2 percent, while NPL cover remained high at 168.2 percent.

BDO’s capital base increased to P364 billion from P311.8 billion, with common equity tier 1 (CET1) and capital adequacy ratio (CAR) improving to 13.1 percent and 14.6 percent, and remaining comfortably above the current regulatory minimum under the Basel III framework.

The country’s largest bank has more than 1,300 operating branches and over 4,400 ATMs nationwide. It also has full-service branches in Hong Kong and Singapore as well as 21 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.