BDO earnings soar to P16.5 billion in Q1

MANILA, Philippines — The net income of Sy-led BDO Unibank Inc. jumped by 41 percent to P16.5 billion in the first quarter from P11.7 billion in the same period last year on the back of broad-based growth across its businesses despite the global uncertainties.

“While macroeconomic challenges persist with still elevated inflation and interest rates, the bank believes it is in a good position to weather short-term volatility and capitalize on long-term growth opportunities given its sound balance sheet, established business franchise and strong and diversified earnings streams,” BDO said in a statement.

The country’s largest lender, owned by the family of the late retail and banking magnate Henry Sy, reported a 28-percent surge in net interest income to P43.4 billion from P33.9 billion.

Likewise, the listed bank also recorded a 13.2-percent increase in non-interest income to P18.9 billion from P16.7 billion, bolstered by solid growth in the various fee-based, as well as treasury and foreign exchange businesses.

BDO’s operating expenses went up by 17 percent, mainly from volume-related costs such as credit card interchange fees, documentary stamp taxes, and gross receipts taxes, consistent with increased activity.

The bank also sustained its information technology (IT) investments and branch expansion with 97 new branches opened since the first quarter of 2022.

It added that revenue growth continued to outpace the growth in operating expenses, resulting in pre-provision operating profit accelerating to P24.9 billion.

BDO said gross customer loans went up by eight percent to P2.6 trillion in the first quarter.

Despite the increase, the bank managed to improve its non-performing loan (NPL) ratio to 1.98 percent from January to March compared with 2.72 percent in the same period last year, while NPL coverage ratio rose to 170 percent from 120 percent as it maintained its conservative credit and provisioning policies.

Provision for impairment losses stood at P3.2 billion in the first quarter of the year,13.5 percent lower than the P3.7 billion allocated in the same quarter last year.

Likewise, the bank’s deposit base expanded by 14 percent to P3.2 trillion. Its return on average common equity advanced to 14.45 percent from 11.09 percent.

“Given the uncertainty, the bank has maintained a healthy balance between loan growth and sufficient liquidity for unforeseen events, maintaining its liquidity ratio at 35 percent,” BDO said in a statement.

Its capital base also strengthened to P475.9 billion, with capital adequacy ratio (CAR) and common equity tier 1 (CET-1) ratio at 14.8 percent and 13.7 percent, respectively, both comfortably above regulatory minimum levels.

BDO has the country’s largest distribution network, with over 1,600 consolidated operating branches and more than 4,600 ATMs nationwide. It also has 16 international offices in Asia, Europe, North America, and the Middle East.

The bank booked a 33.6-percent jump in earnings to a record-high P57.2 billion in 2022 from P42.8 billion in 2021, driven by robust growth across its core businesses.