BDO earnings resilience underpinned by scale, asset quality
From AB Capital's The Opening Bell: Three Moves
Event
BDO reported 4Q25 net income reached P24.1 billion, +13% YoY and +7% QoQ, taking FY25 total to P87.2 billion, +6% YoY. This is slightly ahead of expectations at 102% of street and AB Cap’s 2025E. Loan growth stayed robust at 13% YoY, while asset quality improved with NPL ratio easing to 1.68%.
View
In our view, results highlight BDO’s ability to sustain earnings momentum despite NIM pressures and softer treasury gains. Core NII and fee growth remain healthy, while improving asset quality and manageable provisions support earnings stability heading into 2026.
Catalyst
Near-term drivers include system loan demand, margin trajectory amid potential BSP easing, and credit cost normalization. A 25bp rate cut may compress NIM modestly, though strong CASA at 68% offers buffer.
Action
We maintain a BUY rating and is our top pick in the sector. Current valuations remain reasonable relative to mid-teens ROE potential and strong capital position. We believe continued loan expansion and tempered credit costs should sustain earnings growth.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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