BDOH1 profit surges 54% to P20.2B

BDO Unibank, the country’s leading lender, grew its net profit in the first semester by 54 percent year-on-year to P20.2 billion on stronger earnings from its lending, fee-based and treasury businesses.

The six-month net profit is equivalent to 52.5 percent of BDO’s full-year bottom line goal of P38.5 billion and outperformed market consensus forecast.

In a disclosure to the Philippine Stock Exchange on Friday, BDO reported that its net interest income had increased by 24 percent to P56.9 billion as net interest margins improved to 3.99 percent from 3.5 percent in the same period last year.

Gross customer loan book grew by 7 percent to P2 trillion, driven by a double-digit growth in the consumer and middle market segments.

Six- month noninterest income went up by 29 percent to P29.5 billion as fee- based income and insurance premiums posted double- digit growth. Further, trading and foreign gains amounted to P3.6 billion on favorable capital market conditions, reversing the P78- million loss in the previous year.

On the funding side, total deposits went up by 3 percent to P2.4 trillion, attributed to customers’ shift to higher-yielding fixed income investments, primarily bank-issued bonds.

The bank’s low-cost deposits, however, were maintained at 70 percent of total deposits.

BDO’s operating expenses grew by 21 percent, which the bank attributed to its continuing expansion alongside expenses arising from higher volume of transactions. On the distribution side, there were 53 domestic branches and offices opened in the first semester.

Taxes and licenses and policy reserves at BDO Life increased by 51 percent. Excluding volume-related expenses, operating expense growth would have risen by 14 percent in line with the bank’s investment in branches and business development offices nationwide.

Provisions amounted to P3 billion in line with conservative credit and provisioning policies. Gross nonperforming loans were steady at 1.2 percent of total loans. For every P1 of bad loan, the bank provided a cover of P1.63.

Total capital ended the period at P350.8 billion, with capital adequacy ratio and common equity tier 1 ratio at 14.2 percent and 12.6 percent of total risk assets, respectively.

These improved from the previous quarter and remained in excess of regulatory requirements.

“With expectations of better economic prospects going forward, BDO will continue to build on its business franchise and extensive distribution network to tap new growth areas and underserved markets,” the bank said in a press statement.