BDO opens 64 branches in rural areas this year

CEBU, Philippines — BDO Unibank, Inc., (BDO) opened a total of 64 physical branches this year, despite the growing popularity of online banking.

In a statement, BDO said that most of the 64 new branches were opened in rural areas covered by its subsidiary BDO Network Bank Inc., These additional branches bring the bank’s overall total branches to 1,608 as of September 30, 2022.

The aggressive stance of BDO in expanding its reach is part of its initiatives to help improve financial inclusion, “by providing access to financial service in less dense areas.”

For the first nine months of 2022, BDO grew its net income to P40.0 billion in the first compared to P32.4 billion in the comparative period last year on solid results across its core businesses. This translates to a Return on Average Common Equity (ROCE) of 12.4 percent compared to 10.7 percent posted a year ago.

 Gross customer loans went up by 10 percent year-on-year (YoY), largely funded by low-cost Current Account/Savings Account (CASA) deposits. Due to its high CASA base, net interest income increased to P108.1 billion.

 Non-interest income rose to P53.2 billion led by a 20 percent expansion in fees and insurance premiums, while trading and forex gains were broadly in line with expectations and primarily generated by the flow-related business. Gross operating income amounted to P161.3 billion.

 Operating expenses (OPEX) rose to P98.1 billion, as the Bank continued its branch expansion activities in underserved markets in rural areas, and sustained Information Technology (IT) spending to support its digital initiatives.

 Asset quality improved as the Bank’s NPL (non-performing loan) ratio went down further to 2.23 percent. Still, the Bank maintained its conservative provisioning policy by setting aside provisions of P12.2 billion, resulting in a higher NPL coverage of 152 percent.

 Total capital increased to ?444.6 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) Ratio both comfortably above the regulatory minimum at 14.4 percent and 13.3 percent, respectively.

The Bank has opened a total of 64 branches this year, most of which are in rural areas covered by its subsidiary BDO Network Bank Inc. This brings the Bank’s total branches to 1,608 as of September 30, 2022. This is part of the Bank’s initiative to help improve financial inclusion, by providing access to financial services in less dense areas.

 Despite the Bank’s strong performance year to date, management is conscious of external headwinds brought about by slowing global growth, persistent inflation, and lingering uncertainties related to the Covid-19 pandemic. 

BDO nonetheless believes that its established business franchise and strong balance sheet allow the Bank to overcome near-term risks and achieve long-term sustainable growth. 

To date, BDO has established a total of 16 international offices (including full-service branches in Hong Kong and Singapore) in Asia, Europe, North America, and the Middle East.