BDO net profit surges to P22.6B

The country’s biggest lender Banco de Oro Unibank chalked up a record-high net profit of P22.6 billion in 2013, beating the earnings performance of any other Philippine bank.

BDO’s huge profit last year fueled parent conglomerate SM Investments Corp.’s 11-percent growth in net income to P27.45 billion for 2013.

Reaping the fruits of years of above-industry asset growth, the earnings performance by BDO topped the P22.5-billion net profit posted by Metropolitan Bank and Trust Co. and the P18.8-billion net income booked by Bank of the Philippine Islands for 2013.

The 56-percent rise in net profit to P22.6 billion also outperformed BDO’s P20.4-billion guidance for the year. This translated to an improvement in return on common equity to 14.5 percent from 12 percent in 2012.

The bank attributed its landmark earnings to its core businesses in conjunction with notable trading gains. BDO reported that commercial banking businesses continued their robust growth with net interest income rising 20 percent to P43.2 billion as the bank grew its loan book by 19 percent to breach the P900-billion mark.

Accompanying earnings from its lending and deposit taking activities, BDO also booked P12.8 billion in trading and foreign exchange gains. Fee-based income also continued to show steady improvement, reaching P15.5 billion or an increase of 15 percent.

On the funding side, total deposits stood at P1.3 trillion at the end of the year, or a jump of 44 percent. The bank said its continued branch expansion enabled it to temper the cost of funds, allowing low-cost deposits to grow more than 20 percent.

BDO contributed 42.8 percent to SMIC’s net profit. The recently consolidated property group, consisting of malls and real estate, accounted for 35.9 percent of the group-wide bottomline while retail business accounted for 21.3 percent.

For 2013, SM’s retail segment reported a net income of P5.6 billion, about 15 percent lower than the P6.6-billion net income reported last year as net margins declined to 3 percent from 4.1 percent. On the other hand, retail sales grew by 14 percent to P180.9 billion.

At the end of 2013, SM Retail had a total of 241 stores, consisting of 48 SM Department stores and 193 food stores. The food stores consisted of 39 SM Supermarkets, 39 SM Hypermarkets, 93 SaveMore stores, and 22 Walter Mart supermarkets.