Despite impact of global crisis: BDO Leasing right on track

MANILA, Philippines - If its growth both in revenues and bottom line in 2008 were to be regarded as indicators for this year’s performance, BDO Leasing and Finance, Inc. is on the right track, especially with its plan to boost its product line.

The publicly traded firm, whose ownership is controlled by Banco De Oro Unibank, Inc., said it has brought leasing a step further in response to the changing needs of the market.

By this it means it will continue to give access to a wide range of equipment not covered by other leasing firms. BDO Leasing provides leases for a broad range of equipment and machinery such as IT equipment; industrial and plant equipment; packaging machines; boilers; generator sets; port-handling equipment; and telecommunications equipment. These are on top of the usual leases for transportation; construction and heavy equipment; and medical equipment.

This clearly shows that BDO Leasing is, at all times, ready to accommodate the clients’ requests for coverage of whatever machinery they need to improve their operations.

At this time of global economic uncertainty, some analysts say, leasing is a welcome option vis-a-vis other financing types.

“It widens the choice and gives flexibility to clients which is very appropriate during a crisis,” they said.

Roberto E. Lapid, president of BDO Leasing, agrees.

He says what the clients value most is the minimal cash outlay that leasing requires compared with a straight loan.

“There is no chattel mortgage fee as well. These allow clients to preserve existing credit lines with other financial institutions, have more working capital, and better manage cash flow. Companies that would have been forced to put off their expansion plans can pursue these, knowing that this would not affect their cash flow and cause financial problems,” he explains.

And what makes it more enticing, Lapid adds, is the accounting perks that go with it. “Operating leases are preferred by many because rental payments are fully deductible, allowing business owners to claim input tax.”

For his part, BDO Leasing managing director Antonio N. Cotoco, highlights the company’s offering of other products such as the amortized commercial loan (ACL), allowing businesses to acquire assets through mortgage of collateral, whether real estate or equipment.

“You can avail of higher loan values and expedient processing with BDO Leasing’s ACL,” he says.

BDO Leasing offers very competitive rates which clients value in any economic environment. With a total loans and leasing portfolio of P9.6 billion, the company is able to extend support to businesses when they need it. 

In all these endeavors, Lapid says their constant and reliable partner is parent firm BDO.

“We involve them to further extend its products and services to existing clients such as cash management, insurance, credit cards, corporate trust services and trade facilities. BDO Leasing is also part of the SM Group, with which it shares synergies that would definitely benefit clients,” he notes.

He adds the bank’s extensive market reach also benefits clients with operations outside of the key cities.

“Our products and services are extended to different provinces and key cities by virtue of all our branches which are strategically located in business centers in the Philippines. This way, clients are able to enjoy the same products and services wherever they may be.

BDO Leasing will be further expanding its geographical coverage to reach out to more clients.”

In 2008, the company maintained its leadership in the financing industry and posted growth even at the height of the global crisis.Total revenues were up 10.18 percent to P1.37 billion while net income rose seven percent to P366 million.

And judging its first half 2009 performance, the company is well-positioned to foil the persisting effects of the global economic difficulty.

Topline figure or its gross income grew 70.6 percent to P1.017 billion at the end of the first half from P596.09 million in the same period a year ago. This was a result of the 74.48 percent rise in interest, discounts, rent and service fees to P971.1 million because of higher operating lease income earned by BDO Rental, Inc. Other income also improved 16.3 percent or P6.5 million. Net profit as of end June 2009, on the other hand, reached P117.61 million.