BDO pulled in P20.4-B net profit at end-Sept

The country’s leading lender BDO Unibank chalked up a P20.4-billion net profit at the end of September, reaching 73 percent of its full-year earnings goal for 2017.

Based on a disclosure to the Philippine Stock Exchange, BDO’s nine-month net profit went up by 5 percent year-on-year on a steady growth in core lending and fee-based businesses.

Excluding extraordinary items, BDO’s net income would have expanded by 17 percent year-on-year, the bank said. One-off items were related to the consolidation of BDO’s life insurance business last year.

For the entire 2017, BDO is targeting net profit to reach a record-high P28 billion, 7.3 percent higher than the level posted last year. The bank expects this year’s profitability to be driven mostly by recurring earnings from lending and fee-based businesses.

During the nine-month period, BDO’s net interest earnings rose by 23 percent year-on-year to P59.8 billion, driven by the 18-percent rise in customer loan portfolio to P1.7 trillion.

Expansion

BDO reported an expansion across all loan market segments.

Noninterest income, on the other hand, rose by 9 percent year-on-year to P34.8 billion due to the growth of fee-based income and insurance premiums, which made up for the decline in trading and foreign exchange income.

Fee-based income for the period grew by 30 percent year-on-year to P20.8 billion, while insurance premiums expanded by 19 percent year-on-year to P7.2 billion.

On the other hand, trading and foreign exchange gains declined by 26 percent year-on-year to P3.3 billion.

The expansion in BDO’s earning assets was funded by a 15-percent growth in total deposits to P2.1 trillion, in turn driven by the 20-percent increase in low-cost deposits which accounted for 73 percent of total deposit liabilities.

On the expenditure side, BDO saw a 20-percent increase to P63.6 billion. Net of extraordinary items, operating expenses would have increased by only 13 percent in line with continued business expansion, the bank said.

BDO set aside P4.4 billion in provisions for bad loans even while maintaining a good quality of assets. Bad loans were steady at 1.3 percent of total loan portfolio. For every P1 of nonperforming loans, the bank set aside P1.36 as cover.