BDO profit rises to P63.6 billion

MANILA, Philippines — BDO Unibank Inc. posted a marginal increase in earnings from January to September, supported by strong lending growth and higher interest income despite a challenging economic environment.

In a statement, the Sy-led bank said its net income inched up by 0.8 percent to P63.6 billion in nine months from P63.1 billion in the same period last year. The bank’s return on equity stood at 13.1 percent.

BDO’s loan portfolio expanded by 16 percent to P4.1 trillion as lending grew at double-digit rates across all business segments. This outpaced the banking industry’s 11-percent loan growth during the period.

The robust lending performance helped lift net interest income by 11 percent year-on-year to P166.22 billion.

Meanwhile, total deposits increased by 11 percent to P4.57 trillion, reflecting continued growth in the bank’s funding base. Current and savings account deposits grew by five percent.

Non-interest income, which includes earnings from sources other than lending and investments, rose by three percent.

BDO also reported a 10-percent increase in pre-provision operating profit. The bank attributed the improvement to strong loan growth and disciplined cost management, with operating expenses increasing at a single-digit pace.

Despite its aggressive lending expansion, BDO continued to improve its asset quality during the nine-month period.

Its nonperforming loan (NPL) ratio declined to 1.6 percent from 1.77 percent a year earlier, indicating an improvement in the quality of a bank’s loan portfolio.

Meanwhile, the bank’s NPL coverage ratio remained stable at 132 percent, indicating that its reserves for potential credit losses exceeded the value of its bad loans.

The country’s largest lender set aside P17.7 billion as provision for impairment losses, including pre-emptive provisions in the early part of the year due to the onset of the Middle East crisis.

BDO also maintained a solid capital position, with shareholders’ equity increasing by six percent. Its book value per share, which represents the accounting value of shareholders’ equity attributable to each outstanding share, rose by six percent to P123.6.

The bank’s common equity tier 1 ratio stood at 12.6 percent.

“BDO remains poised to capitalize on opportunities that support its long-term growth objectives amid changing market conditions and a dynamic operating environment, backed by its diversified business model, solid financial position and market-leading franchise,” it said.