BDO Leasing grew ’20 net earnings by over 5 times

DESPITE the economic turmoil due to lockdown protocols against the pandemic, BDO Leasing and Finance Inc. grew its net earnings by over five times last year. BDO Leasing said in a disclosure on Tuesday that its profits in 2020 reached P252.3 million, which was significantly higher than P46.8 million in 2019, due to “stable asset yields and lower funding costs.” Still, this was lower than the P330.7million profit it registered in 2018.

Total expenses for the period declined by 34 percent to P2 billion. Interest and financing charges plunged 62 percent amid the low interest rate environment and lower borrowing levels.

Gross revenues, meanwhile, skidded by 22 percent to P2.4 billion last year. The listed company attributed this to lower interest income following the sale of most of its earning assets to BDO Unibank Group, which resulted in scaled down operations.

BDO Unibank is restructuring its leasing business to optimize the financial needs of the clients amid the release of new accounting regulations about lease transactions. With this, it incorporated BDO Finance Corp., a privately held company, to handle its lease products and services.

BDO Leasing, in October last year, transferred 27.02 percent of its assets to BDO Finance. Bulk of these include mortgage receivables from credit transactions secured by real estate mortgage and other receivables from other financing activities.

Prior to this, BDO Unibank and BDO Finance also bought 10 percent of BDO Leasing’s assets, proceeds of which were earmarked to pay off existing obligations of the latter.

BDO Unibank saw its net income slip by 36 percent to P28.2 billion last year from P44.2 billion 2019 as loan loss buffers reached P30.2 billion for the period. 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.