BDO books higher net earnings in 2018 as core businesses grow

BDO UNIBANK, Inc. saw its net income rise in 2018, buoyed by robust earnings from its core businesses.
In a regulatory filing on Monday, the Sy-led lender reported a record-high net income of P32.7 billion last year, climbing by 17% from the P28.1 billion tallied in the same period in 2017.
BDO’s full-year income in 2018 also surpassed the bank’s P31-billion profit guidance.
The bank attributed its full-year income growth to the “solid” performance of its core lending and deposit-taking businesses, resulting in a 20% expansion in its net interest income to P98.3 billion from P81.8 billion the prior year.
The bank’s net interest margin improved to 3.64% in 2018 from the 3.48% tallied in the previous year.
Gross customer loans stood at P2 trillion in 2018, up 15% from the P1.8 trillion booked in the comparative year-ago period, amid “healthy” increases across all market segments.
Non-performing loan ratio stood at 1% as of end-2018, improving from 1.2% a year ago.
Total deposits also went up to P2.4 trillion, higher by 14% from P2.1 trillion in 2017. Low-cost current and savings account ratio settled at 70%.
BDO’s non-interest income, on the other hand, stood at P49.7 billion, up from P47.2 billion the previous year, with fee-based income contributing P30.7 billion and insurance premiums growing 20%.
Overall, gross operating income was at P148 billion last year, up 15% from P129 billion in 2017.
Meanwhile, BDO’s operating expenses climbed 16% to P98 billion driven by “sustained” investments in branch network and strategic initiatives.
Excluding tax and licenses, which grew by 41% due to higher business volumes and increased documentary stamp taxes, operating expenses would have grown by 13%, BDO said.
The lender also set aside P6.3 billion in provisions for losses in 2018, down from the previous year’s P6.5 billion.
BDO’s capital base stood at P328.1 billion, with its capital adequacy ratio at 13.7% and common equity Tier 1 ratio at 12.1%.
According to separate a disclosure, BDO’s assets stood at P2.89 trillion at end-2018.
“BDO is well-positioned to take advantage of market opportunities and strengthen its leadership position in the industry by leveraging on its strong business franchise and extensive distribution network,” a statement from the bank read.
In May last year, BDO raised P8.2 billion via 5.5-year long-term negotiable certificates of time deposit to be used for liability management.
It also issued P35 billion in peso-denominated fixed-rate bonds earlier this month, marking the first tranche of its P100-billion bond program announced in August 2018.
As of end-September 2018, BDO was the biggest universal bank in the country in asset terms at P2.79 trillion.
BDO shares closed at P131 apiece on Tuesday, gaining P2 or 1.55% from Friday’s close. — Karl Angelo N. Vidal