BDO net income up 5% as of September 2017

BDO UNIBANK, Inc. (BDO) posted higher earnings in the first nine months of the year, driven by higher income from its core and fee-based businesses.

In a disclosure to the local bourse on Monday, the Sy- led bank said it booked a P20.4billion net income in the nine months ended September, up 5% from the P19.3 billion booked the same period a year ago.

“On a normalized basis, net income would have grown by 17% after excluding extraordinary items primarily related to the consolidation of the bank’s life insurance business in 2016,” the disclosure read. BDO Life Assurance Co., Inc. is the insurance subsidiary of the bank. Previously known as Generali Pilipinas Life Assurance Co., BDO fully acquired its parent company Generali Pilipinas Holdings Co. Inc. in July 2016.

BDO said its net interest income rose 23% to P59.8 billion in the first nine months. This was mainly driven by customer loans, which rose by 18% to P1.7 billion, “as broad- based expansion was seen across all market segments.”

Total deposits rose 15% to P2.1 trillion, driven by a 20% expansion in the bank’s current account/savings account deposits, which cornered 73% of the total.

On the other hand, non-interest income grew 9% to P34.8 billion. This was mainly on the back of a 30% increase in its fee-based earnings to P20.8 billion and the 19% growth insurance premiums to P7.2 billion. Meanwhile, trading and foreign exchange income declined 26% to P3.3 billion.

Offsetting the rise in interest and non-interest incomes was the bank’s higher operating expenses, which increased 20% to P63.6 billion in line with the bank’s continued expansion.

Meanwhile, the bank also ramped up its loss provisions to P4.4 billion even as its nonperforming loan (NPL) ratio and NPL cover were steady at 1.3% and 136%, respectively.

BDO’s capital base stood at P294.7 billion. Its common equity Tier 1 ratio came in at 13.4%, while its capital adequacy ratio was at 15.1%, well above the regulatory minimum.

“With a strong capital base, solid business franchise and extensive geographic reach, the bank is well- positioned to take full advantage of the country’s growth opportunities and further strengthen its dominance in the industry.”

BDO is the country’s largest bank in terms of assets, loans, deposits and trust funds under management, according to central bank data.

The bank has more than 1,100 branches and over 3,800 automated teller machines nationwide.

BDO shares closed at P137.50 each on Monday, down 50 centavos or 0.36%.