BDO banks on core business, expansion for income growth

SY-LED BDO Unibank, Inc. (BDO) is looking into attaining equal growth in its expansion and core business activities for bank to be able to hit its P28.8-billion earnings guidance for 2017, the lender’s chief executive said.

The bank had said in a prospectus submitted to the local bourse last December that it expects its bottom line to reach P28.81 billion by end-2017, higher than its P26-billion earnings guidance for 2016, with the boost to come from its core business as the lender rides on the country’s economic growth.

“Growth for…2017 is expected to remain healthy, supported by the increased infrastructure spending and sustained consumer demand on the back of steady overseas Filipino workers remittances and increasing BPO ( business process outsourcing) revenues,” BDO said in the prospectus.

In 2016, the bank surpassed its income guidance as its bottom line reached P26.1 billion, nearly 4% higher than the P25.1 billion booked in 2015, on the back of double digit increases in interest and fee-based revenue.

Asked how the bank would be able to hit its earnings goal for the year, BDO President and

Chief Executive Officer Nestor V. Tan told reporters in a recent interview: “I think it’s really our difficulty. We’re expanding the business but we’re also investing in [our] business lines like One Network Bank (ONB), insurance, BDO Nomura.”

In August 2014, the listed lender bought 96% of the biggest Mindanao- based rural lender One Network Bank, Inc., while BDO Nomura Securities Inc. is a joint venture between Japanese investment bank Nomura Holdings, Inc. and BDO.

“So what we’ll have to do is strike a balance between the growth of the business, achieving a certain level of profit and also investing in future income generating activities,” Mr. Tan explained.

The bank’s chief earlier said that BDO aims to add 50 to 70 branches this year, with most to be situated outside the National Capital Region.

At end-2016, the listed lender had a total branch network of 982. Broken down, 492 of its branches were located in Metro Manila while 305 were in Luzon, 108 in Visayas and 76 in Mindanao, according to an earlier disclosure.

Shares in BDO lost P1.40 or 1.15% to close at P120.60 apiece last Friday.