MANILA, Philippines - BDO Unibank Inc. (BDO) delivered a record net income of P22.8 billion in 2014, matching its earnings guidance for the year and driven by the strong expansion of its core businesses. This represented an 18 percent growth in terms of recurring earnings (i.e., excluding one-off gains booked in 2013).
The bank’s customer loan portfolio outpaced industry with a 20 percent growth to hit P1.1 trillion. Meanwhile, total deposits rose 11 percent to P1.5 trillion, driven primarily by a 24 percent increase in CASA. This yielded a 19 percent increase in net interest income (NII) to P51.2 billion. Fee-based service income contributed P18.0 billion, up 16 percent from a year ago.This strong growth in NII and fees more than compensated for the decline in trading and foreign exchange gains. As such, gross operating income increased eight percent to P80.7 billion.
The bank kept its operating expense growth at 12 percent despite the sustained business and branch expansion.The bank set aside P5.1 billion in provisions for the year, even as asset quality continued to improve, with gross non-performing loan (NPL) ratio falling further to 1.3 percent from 1.6 percent in 2013. Reflective of its prudent provisioning policies, the Bank increased its NPL cover to 188 percent in 2014 from 173 percent in 2013.
The bank’s capital base stood at P180 billion, with both the capital adequacy ratio (CAR) and common equity tier 1 (CET1) ratio all comfortably above the regulatory minimum under the Basel III framework at 14.6 percent and 12.4 percent, respectively.
With a strong business franchise, sustained growth strategy and solid capital base, BDO remains well-positioned to take advantage of emerging opportunities as well as face potential market challenges.