At record P28.1-B profit in 2017, BDO still the bank on top
The country’s leading lender BDO Unibank chalked up a record high net profit of P28.1 billion in 2017, meeting its target and maintaining the highest bottom line among its banking peers.
The figure marked a net growth of 7 percent, thanks to lending activities and fee-based businesses, the SM group-led bank disclosed to the Philippine Stock Exchange on Monday.
The P28.1-billion profit was the highest net profit level among Philippine banks, as the Sy firm reaped the fruits of above-industry asset growth in the last two decades. BDO’s net profit exceeded Bank of the Philippine Islands’ P22.42 billion and Metropolitan Bank and Trust Co.’s P18.22 billion for the same year.
Excluding the consolidation effects of its life insurance business, last year’s performance also marked a 15-percent improvement in BDO’s core profitability.
Net interest income rose by 25 percent last year to P81.8 billion, supported by an 18-percent expansion in the lending book across all loan segments.
The expansion in earnings assets was funded by an 11-percent growth in deposits to P2.1 billion. Low-cost deposits grew by 12 percent and accounted for 73 percent of total deposits.
Non-interest income went up by 13 percent to P47.2 billion, with fee-based income accounting for a 30-percent expansion. In addition, insurance premiums rose by 23 percent to P9.9 billion. These offset the expected 20-percent decline in securities and foreign exchange trading gains to P3.9 billion.
Overall, gross operating income advanced by 20 percent to P129 billion.
Operating expenses, on the other hand, rose by 21 percent to P84.9 billion. Excluding extraordinary items, BDO said operating expenses would have increased by only 15 percent, reflecting continuing investments in the branch network and other strategic initiatives.
BDO added 76 branches last year, bringing total consolidated branches, including the Hong Kong unit, to 1,180.
The bank set aside a higher P6.5 billion to cover required provisioning associated with the change in loan-loss methodology.
Bad loans eased to 1.2 percent of total loans from 1.3 percent the previous year. For every P1 worth of bad loans, BDO set aside P1.46 as buffer, higher than the P1.39 set aside the previous year.
BDO’s capital base stood at P298.3 billion, with total capital adequacy ratio (CAR) and common equity tier 1 ratio at 14.5 percent and 12.9 percent, respectively, both of which were well above regulatory levels.
The bank had raised P60 billion in fresh equity via a stock rights offer in early 2017.
“For 2018, BDO believes that its focused growth strategy, robust business franchise and solid balance sheet and capital base place the bank well-positioned to tap opportunities in growth sectors benefiting from the country’s favorable demographics and the government’s infrastructure buildup,” the bank said.
