BDO posts income in H1, sets LTNCD issue

BDO Unibank, Inc. (BDO) reported yesterday a net income of R13.3 billion in the first six months of 2017, primarily driven by an expansion in loan portfolio, growth in low-cost deposits and higher recurring fee-based service income.

In a disclosure to the Philippine Stock Exchange, the bank said that, excluding the extraordinary items from the consolidation of newly acquired subsidiary BDO Life last year, this represents a strong 16 percent growth in core earnings.

The Bank’s core businesses delivered solid numbers, with net interest income going up by 22 percent to R38.6 billion as customer loans increased by 17 percent to R1.6 trillion.

Total deposits rose to almost R2.0 trillion, supported by the 17 percent jump in low-cost current account and savings account deposits, now comprising 73 percent of total deposits.

Meanwhile, non-interest income amounted to R23.2 billion driven by fee-based service income. On a comparable basis, feebased income rose by 13 percent.

Insurance premiums advanced by 17 percent to R4.6 billion, while Trading and forex gains declined 21 percent to R2.6 billion from R3.2 billion a year ago.

Operating expenses increased by 20 percent on the Bank’s aggressive drive to grow its core business along with investments in new markets. Excluding extraordinary items and the consolidation effects of ONB and BDO Life, operating expenses would have risen by only 14 percent.

The Bank prudently set aside provisions of R2.9 billion even as asset quality remained benign with gross non-performing loan (NPL) ratio steady at 1.3 percent, and NPL cover at 137 percent.

Meanwhile, BDO is set to issue R5.0 billion of Long-Term Negotiable Certificates of Deposit (LTNCD) as part of the Bank’s efforts to diversify the maturity of its funding sources and support business expansion plans.