BDO FY24 profit: P84B (up 12%)

BDO [BDO 141.00, down 0.7%] [link] posted a FY24 net income of P84 billion, up 12% from its FY23 net income of P73.4 billion. BDO attributes its improved profitability to “solid performances across core businesses”. Gross customer loans grew 13% to P3.2 trillion, with “double-digit growth across all segments”. Book value per share increased 11% to P107.83. BDO said that it opened 71 branches in FY24 (+4%) with the “majority of which located in rural and provincial areas”. BDO is using a “sustained branch expansion” strategy to “broaden its reach, particularly in underserved areas, and enhancing customer convenience and accessibility.”

MB bottom-line: Remember those dire times back in 2020 when BDO “only” made P28 billion in profit? Dark, dark times. Now, thanks to a confluence of factors, BDO’s profitability is double that of its pre-pandemic level, and its stock price is up almost 100% from those post-crash lows in 2020. That’s pretty good, except that its stock price is actually in the midst of a medium-term downturn, dropping approximately 15% from its September 2024 highs. What happened then? I don’t really know, but I suspect it was the growing realization that interest rate cuts were a possibility. You see, banks have been cashing in on these higher interest rates that have been obliterating owners, small businesses, and consumers. The RRR cut helps, but I think the resurgence of inflation in the US and the realization that we are not going to get a rapid sequence of rate cuts will help BDO’s bottom line (and stock price) more. But that’s just as a casual observer. I’d love to hear from some true bank stock analysts. Is BDO headed for higher highs, or is it stuck in a holding pattern?

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