BDO LEASING and Finance, Inc. saw a decline in its net income in the first half of the year due to higher costs.
In a regulatory filing on Wednesday, the listed leasing and financing arm of Sy-led BDO Unibank, Inc. said it booked a net profit of P178 million in the January-June period, 36.9% lower than the P282 million tallied in the same period last year.
BDO Leasing attributed its lower profit to “higher funding and operating costs.”
Despite logging lower net income in the first semester of the year, the firm’s gross revenues climbed 4% year-on-year.
This was mainly driven by a P34-billion interest income from its lease and finance portfolio, augmented by service fees and other income.
However, BDO Leasing said this was tempered by higher financing charges and lower interest margins.
Higher documentary stamp tax on its commercial paper issue also helped temper its revenue growth.
The government doubled the rate of the documentary stamp tax under the Tax Reform on Acceleration and Inclusion law which was enacted this year.
Moving ahead, BDO Leasing said it will continue to leverage on the broad market reach of its parent company. It will also continue to strengthen its marketing efforts in emerging provincial areas to extend leasing and financing services to the growth sectors of the economy.
“Additionally, the company intends to expand and optimize its funding sources to match its asset growth and manage its funding costs,” the company added.
According to latest central bank data, BDO Leasing’s parent BDO is the country’s biggest bank in terms of assets, capital, deposits and loans.
BDO Leasing shares closed unchanged at P2.76 apiece on Wednesday. — K.A.N. Vidal