Sy-led BDO Unibank Inc., the country’s largest lender, saw robust profit growth in the first nine months of the year, which it hoped to sustain despite “external headwinds” that could impact economic growth.
BDO said in a stock exchange filing on Friday that net income from January to September rose over 23 percent to P40 billion due to solid results across its core businesses.
Its gross customer loans jumped 10 percent from last year due to gains from low-cost current and savings account deposits, pushing up interest income to P108.1 billion.
Non-interest income went up 20 percent to P53.2 billion on higher fees and insurance premiums. Trading and foreign exchange gains “were broadly in line with expectation and primarily generated by flow-related business,” BDO added.
Gross operating income amounted to P161.3 billion during the first three quarters of the year.
“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 said in the filing.
“BDO nonetheless believes that its established business franchise and strong balance sheet allows the Bank to overcome near-term risks and achieve long-term sustainable growth,” it added.
The lender’s earnings translated to a return on average common equity of 12.4 percent, which was higher than 10.7 percent posted a year ago.
The company also saw a reduction of bad debts in its portfolio, with its non-performing loans going down to 2.23 percent.
Nevertheless, BDO maintained a “conservative provisioning policy” by setting aside provisions of P12.2 billion, resulting in a higher NPL coverage of 152 percent, to cover for potential losses amid the uncertain economic outlook.
Meanwhile, operating expenses rose to P98.1 billion following its expansion in underserved markets and sustained information technology upgrades.
Total capital increased to P444.6 billion, with capital adequacy ratio and common equity tier 1 ratio at 14.4 percent and 13.3 percent, respectively.
BDO opened 64 new branches during the period, with most located in rural areas via subsidiary BDO Network Bank Inc. This brings the bank’s total branches to 1,608 at the end of September this year.