The country’s largest lender, BDO Unibank, posted a record-high net profit of P32.7 billion in 2018, exceeding its full-year goal despite a challenging macroeconomic environment.
BDO also became the first Philippine bank to breach the P3-trillion asset milestone.
The net profit booked by BDO last year marked a 17-percent increase from the bottomline level in 2017. This was on the back of improved margins and the expansion of its earning assets, the bank told the Philippine Stock Exchange on Tuesday.
This 2018 net profit level also beat BDO’s full-year guidance of P31 billion. This suggested that the banks generated P11.18 billion in net profit in the fourth quarter. In the first three quarters, net profit hit P21.52 billion, up by 5.7 percent year-on-year.
BDO attributed the profit performance to the solid growth of its core lending and deposit-taking businesses.
The local banking giant grew its loan book last year by 15 percent to P2 trillion while deposits expanded by 14 percent to P2.4 billion, of which low-cost deposits accounted for 70 percent.
Net interest income rose by 20 percent to P98.3 billion as net income margin increased to 3.64 percent from 3.48 percent in the previous year.
Non-interest income for the year amounted to P49.7 billion, up 5.3 percent from year-ago level. Fee-based income contributed P30.7 billion, rising by 6.2 percent while insurance premiums were up 20 percent.
Operating expenses went up by 16 percent to P98 billion as the bank sustained investments in branch network and strategic initiatives.
Excluding taxes and licenses—which rose by 41 percent as a result of higher business volumes and increased documentary stamp taxes under the new tax program—operating expenses would have grown by 13 percent.
The bank set aside P6.3 billion as buffer for probable loan losses even as bad loans declined to 1 percent of total loans from 1.2 percent a year ago.
Bad loan cover was higher at 183 percent compared to 146 percent in the previous year.
BDO ended last year with capital of P328.1 billion. Capital adequacy ratio and common equity tier 1 ratio stood at 13.7 percent and 12.1 percent of risk assets, above minimum regulatory levels.
The bank and its subsidiaries operate over 1,200 branches and more than 4,000 automated teller machines nationwide. It has 24 overseas remittance and representative offices, including full-service branches, outside the Philippines.