2011 performance will outdo 2010 - BDO

MANILA, Philippines - Industry leader Banco de Oro Unibank Inc. (BDO) is poised to outperform its 2010 earnings as it has been growing by nearly an average 20 percent in the past three quarters this year.

 Last year, net earnings hit a corporate record of P8.8 billion, or 46 percent higher than the P6 billion in 2009.

Assuming the bank’s net income rises by 20 percent from the 2010 level, that will mean the commercial bank of the SM Group will report a net income of at least P10.5 billion, another corporate historical high.

At the end of three quarters, its net income stood at P7.6 billion, or rising by 19 percent when compared to the P6.4 billion in the comparable period in 2010.

 At the end of the first semester, net earnings stood at P5 billion or a 20-percent increased from the P4.2 billion in the same period in 2010.

 In the first three months of 2011, BDO reported income reaching P2.44 billion or a little over 18 percent better than the P2.07 billion in the same quarter in 2010.

 The regional investment group CLSA Asia-Pacific said that it expects BDO to post P10.08 billion in profit, 48 percent of which had been attained in the first six months based on net earnings adjusted for dividends associated with preferred shares.

However, BDO president and chief executive officer Nestor V. Tan downplayed the strong quarterly growth of the bank.

“There is good contribution from all sectors and all product lines,” Tan merely said.

In its report to the Philippine Stock Exchange (PSE) regarding its first nine-month report, the bank said that “a balanced increase in most banking services were reported in the nine-month period, despite the difficult operating environment here and overseas.”

In contrast to the negative reports of some commercial banks, BDO experienced double-digit growth in securities trading and foreign exchange gains to P5.1 billion.

“We have been conservative in securities trading,” Tan said.

Instead, BDO issued peso-denominated unsecured subordinated notes qualifying as Tier 2 capital worth P6.5 billion in October. Last June, the first offering for tier 2 capital notes amounted to P8.5 billion.

The Tier 2 notes in June and October is actually part of its P15-billion program approved by the Bangko Sentral ng Pilipinas (BSP) for 2011.

Of the 16 Philippine banks that made it to the Top 500 list based on a study by The Asian Banker, BDO was ranked number one.

The bank was classified as the largest Philippine bank, and ranked 186th among the top 500 banks in the region.

BDO has one of the largest distribution networks, with over 740 operating branches and more than 1,400 ATMs, nationwide. Total resources exceeded the P1-trillion level at the start of 2011.