BDO continues hot streak as income rises by 12%

MANILA, Philippines  — Sy family-led BDO Unibank Inc. saw its earnings in the first quarter of the year climb by 12 percent to P18.5 billion as its core businesses improved and its lending portfolio grew.

In a stock exchange filing on Thursday, BDO said its net interest income from January to March grew by 12 percent to P48.9 billion as customer loans rose.

BDO, the country’s largest lender, reported that this segment expanded by 13 percent to P2.92 trillion.

Deposits, meanwhile, climbed to P3.63 trillion, up by 13 percent from the same period last year, driven by low-cost current and savings accounts.

READ: BDO shatters PH income records

“BDO’s mission to be the preferred bank in every market it serves anchors its business philosophy of pursuing long-term growth and profitability while sustaining market leadership backed by a strong balance sheet and diversified business franchise,” it said in its disclosure.

The first quarter performance of the banking arm of conglomerate SM Investments Corp. resulted in a return on common equity of 14.3 percent. This was lower than the 14.45 percent recorded in the same period in 2023.

Bad loans ratio

The nonperforming loan (NPL) ratio improved to 1.88 percent from 1.98 percent, while NPL coverage settled at 181 percent from 170 percent. NPLs refer to loans that are unlikely to be repaid by the borrower.

Last year, BDO recorded the highest-ever net income in Philippine corporate history at P73.4 billion, a 28-percent jump as net interest earnings surged.

Net interest income last year rose by nearly 25 percent to P186.4 billion.

READ: Banks’ soured loans jumped in 2023 amid high rates

BDO likewise set the record for the largest amount raised from a bond sale, securing P63.3 billion in January and surpassing the P60 billion raised by conglomerate San Miguel Corp. of billionaire Ramon Ang in 2023.

BDO said the issuance was backed by “strong demand from retail and institutional investors, with a rapid build-up in orders.” As a result, the bank increased by more than 12 times the offer from the original P5 billion.

Proceeds would then be used to diversify funding sources and refinance eligible assets, BDO had said.