BDO profit surged by 47% in H1 2023

MANILA  -The Sy family’s BDO Unibank Inc., the country’s biggest lender, extended its profitability streak in the first semester of 2023 as net income jumped 47 percent to P35.2 billion on stable growth of loans and a sharp increase in lending rates.

Net interest income from January to June surged 29 percent to P89.5 billion while gross customer loans expanded to P2.7 trillion, up 8 percent versus the same period last year.

“With improving macroeconomic trends exemplified by decelerating inflation, sustained [gross domestic product] growth and stable foreign exchange and interest rates, the bank remains poised to capitalize on emerging growth opportunities given its solid balance sheet, strong business franchise and diversified earnings streams,” BDO said in a statement on Monday.

Non-interest income also added 11 percent to P38.2 billion amid gains from fees and its treasury/foreign exchange operations.

The lending giant, part of the Sy family conglomerate SM Investments Corp., ended the period with robust earnings amid a period of high interest rates as the Bangko Sentral ng Pilipinas, alongside global central banks, sought to cool red-hot inflation.

It closed the period with a return on common equity of 15.1 percent versus 11.3 percent during the same period in 2022.

BDO also benefited from improving economic conditions, as its non-performing loan ratio dropped to 1.95 percent from 1.98 percent last year. The NPL coverage ratio also increased to 174 percent as it maintained conservative provisioning polices.

Meanwhile, total deposits rose by 12 percent to P3.3 trillion. Overall, assets grew by 9 percent to P4.2 trillion as it expanded loans and investment securities. Shareholders’ equity increased to P487.5 billion during the first half.

BDO said the end-June capital adequacy ratio and common equity tier 1 ratio strengthened to 15 percent and 13.9 percent, well above regulatory minimum levels.