BDO earns P40.7 billion in 6 months

MANILA, Philippines — BDO Unibank Inc. saw its first-half earnings edge higher to P40.7 billion as double-digit loan growth and stronger core revenues offset higher provisions set aside for emerging credit risks.

The Sy-led bank’s net income was only slightly above the P40.6 billion recorded in the same period last year, reflecting the continued resilience of BDO’s core businesses. Return on equity stood at 12.7 percent.

Despite the modest increase in the bottom line, BDO posted stronger underlying operations during the six-month period as lending expanded across all business segments and asset quality continued to improve.

Net interest income, the bank’s main revenue source, climbed by 11 percent year on year as gross customer loans grew by 15 percent to P3.9 trillion.

BDO said the expansion was broad-based, with all loan segments posting double-digit growth. The bank also said its loan portfolio continued to outpace industry growth.

Total deposits rose by 13 percent, while low-cost current and savings account deposits increased by four percent.

Non-interest income, meanwhile, went up by four percent, supported mainly by a 14-percent increase in contributions from insurance operations.

With operating expenses kept at a single-digit growth pace, BDO’s pre-provision operating profit advanced by 12 percent during the period.

However, the country’s largest bank raised provisions for potential credit losses as a buffer against risks in the operating environment.

BDO described the increase in provisions as a “prudential measure against evolving risks,” even as its asset quality indicators improved during the first half.

Its non-performing loan ratio eased to 1.64 percent from 1.75 percent a year earlier, indicating that a smaller portion of its loan book had turned sour. NPL coverage, which measures the amount of reserves available against bad loans, stood at 132 percent.

BDO also maintained strong capital buffers. Shareholders’ equity rose by eight percent, while book value per share increased to P121.78. Its common equity tier 1 ratio stood at 13.1 percent.

“Backed by strong business fundamentals, a healthy balance sheet and its market leadership position, BDO remains well-positioned to navigate prevailing uncertainties and capture opportunities in an evolving business environment,” BDO said.

As of end-March, BDO remained the country’s largest bank in terms of assets, loans, deposits and trust funds under management. It operates more than 2,000 consolidated branches and over 7,900 teller machines nationwide.