BDO Unibank nets lower profits in 2020 at ₧28.2B

BDO Unibank Inc. registered a 36-percent drop in net earnings last year due to increased pre-emptive provisions against potential credit losses amid uncertainties brought about by government’s response against the pandemic.

The Sy-led bank reported in a statement on Wednesday that its profits plunged to P28.2 billion last year from P44.2 billion in 2019. This, as loan loss buffers reached P30.2 billion for the period.

“The Bank relied on its strong and resilient business franchise and balance sheet to support core business operations, despite significant hurdles from the pandemic and ensuing economic lockdown,” BDO said.

Shares in BDO slipped by 1.71 percent, or P1.80, to close at P103.20 each amid the 0.86-percent drop for the benchmark index on Wednesday.

BDO’S net interest income last year rose by 12 percent to P133.7 billion.

The bank grew its loan portfolio by 3 percent to P2.3 trillion, thanks to demand in consumer and corporate segments. BDO said it was still assisting its borrowers to ensure continued access to credit facilities.

Nonperforming loan (NPL) ratio and NPL coverage stood at 2.65 percent and 109.5 percent, respectively, as of end-december 2020. Total loan loss reserves were at 3 percent of the gross customer loans.

Current and savings account deposits climbed by 17 percent to P2.1 billion last year.

Despite booking higher trading gains, non-interest income slid 8 percent to P55.2 billion in 2020.

“Business volumes were initially impacted by mobility restrictions, but have since begun to recover gradually,” the bank explained. “Wealth management, on the other hand, remained resilient with trust volumes and fees sustaining growth.”

Operating expenses, meanwhile, declined by 2 percent to P112.6 billion because of lower marketing and volume-related spending.

As of end-december 2020, capitalization was at P393 billion, with capital adequacy ratio at 14.4 percent and common equity tier 1 ratio at 13.2 percent.

This year, the Sy-led bank said it is “cautiously optimistic on a gradual upturn” for this year.

“With its extensive market reach and devoted workforce, the Bank remains committed to providing banking products and services attuned to its customers’ needs,” the bank added.

BDO earlier said it was eyeing to install more upgraded automated teller machine (ATM) terminals this year to allow cardless, QR (quick response) code-based withdrawals. There are over 100 Qr-enabled ATMS in Makati currently.

Beginning April 7, BDO, along with other local banks, will be adopting acquirer-based ATM fee charging principle as mandated by the Bangko Sentral ng Pilipinas. This scheme will charge cardholders for balance inquiry or fund withdrawal based on the fees imposed for other banks by ATM operators.

With this, the Sy-led bank will charge non-bdo clients P18 for withdrawal and P2 for balance inquiry.