BDO net in­come climbs in Q1 on strong lend­ing

Business World - - BANKING & FINANCE - Janine Marie D. Soli­man

SY-LED BDO Uni­bank, Inc. (BDO) saw its net in­come reach P5.8 bil­lion in the first quar­ter of the year, mainly driven by an in­crease in its net in­ter­est in­come on the back of a dou­ble-digit ex­pan­sion in its loans dur­ing the pe­riod.

The coun­try’s largest bank said it recorded a 6% growth to P5.8 bil­lion in its bot­tom line in the first three months of 2017 com­pared to the P5.5 bil­lion booked in the same pe­riod in 2016.

Its net in­ter­est in­come grew 19% to P18.4 bil­lion in the quar­ter from P15.5 bil­lion in the same pe­riod in 2016.

The bank’s cus­tomer loans like­wise rose to P1.5 tril­lion or 21% higher year on year, while to­tal de­posits ex­panded by 13% to P1.9 tril­lion from the P1.7 tril­lion recorded in the same pe­riod last year af­ter its low- cost cur­rent ac­count and sav­ings ac­count de­posits grew 17%.

“We ex­pect sus­tained ex­pan­sion in loans and de­posits,” BDO Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer Nestor V. Tan told re­porters in a me­dia brief­ing on Thurs­day, re­fer­ring to the bank’s out­look for 2017.

BDO’s pro­vi­sions amounted to P1.4 bil­lion dur­ing the quar­ter even as its as­set qual­ity re­mained “healthy” with its non­per­form­ing loans (NPL) ra­tio stay­ing at 1.3% and NPL cover at 138%.

Mean­while, its fee-based ser­vice in­come from pay­ments and set­tle­ments, credit card ac­quir­ing fees and wealth man­age­ment ser­vices also ex­panded to P6.8 bil­lion, up 42% year on year.

“We see a steady rise in fee in­come [ this year] as our busi­nesses start to

con­sol­i­date in ar­eas out­side the Na­tional Cap­i­tal Re­gion,” Mr. Tan said.

The Sy-led bank’s P60-bil­lion stock rights of­fer brought its cap­i­tal base to P282 bil­lion that boosted its cap­i­tal ad­e­quacy ra­tio to 15.6% in the first quar­ter and its com­mon eq­uity Tier 1 ra­tio to 14%.

“We will con­tinue to ex­pand our branch net­work be­cause we be­lieve that the econ­omy out­side of the NCR will drive our growth in the fu­ture,” Mr. Tan said.

“And we will con­tinue to di­ver­sify as we said we’re ex­pand­ing in mi­cro­fi­nance to One Net­work Bank (ONB), to the un­der­served and we’re ex­pand­ing our life in­sur­ance busi­ness,” he added. In Au­gust 2014, the listed lender bought 96% of the big­gest Min­danao-based ru­ral lender ONB.

For this year, Mr. Tan said the bank has trimmed their earn­ings guid­ance to P28 bil­lion from the P28.8 bil­lion pre­vi­ously “be­cause of the ac­cel­er­ated in­vest­ments in our ini­tia­tives.”

Mean­while, asked if they would want to be­come a qual­i­fied As­so­ci­a­tion of South­east Asian Na­tion (ASEAN) bank (QAB) for the ASEAN Bank­ing In­te­gra­tion Frame­work (ABIF), Mr. Tan said, “Def­i­nitely, be­cause we would like to have a bank that meet ASEAN stan­dards.”

The ABIF was first en­dorsed in De­cem­ber 2014 and sought to al­low duly-iden­ti­fied QABs to “op­er­ate freely” across mem­bere­conomies in the re­gion.

To be named as a QAB, lenders must se­cure the en­dorse­ment of reg­u­la­tors in its home coun­try and be ac­cepted by off­shore au­thor­i­ties where it wants to set up op­er­a­tions.

Shares in BDO lost P1.10 or 0.92% to end at P118.80 apiece on Thurs­day.

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