BDO UNIBANK, Inc. saw its net income jump by more than a third in 2019 on the back of core recurring income sources.

In a statement on Thursday, the Sy-led lender said its net income hit P44.2 billion in 2019, surging by 35.16% from the P32.7 billion booked in 2018.

“The results exceeded the bank’s P38.5 billion guidance and translate to a return on common equity of 12.8% from 10.7% the year before,” the bank said.

According to the lender, its record-high net income in 2019 was on the back of the “strong performance of its core recurring income sources.”

Net interest income grew to P119.9 billion, up by 2.19% from the P98.3 billion booked in the preceding year.

“Net interest margin improved on continued CASA (current account, saving account) growth and improving loan mix in favor of consumer and middle market customers,” BDO said.

Loans inched up by nine percent to P2.2 trillion buoyed by growth across market segments.

Meanwhile, the bank’s non-performing loan (NPL) ratio was steady at 1.2% despite the increase in credit, while NPL cover “remained high at 164.7%.”

BDO set aside P6.2 billion in provisions as an effort to maintain its “conservative credit and provisioning policies,” it said.

On the other hand, total deposits rose by three percent to P2.5 trillion, backed by the eight-percent growth in low-cost CASA deposits which make up 73% of total deposits.

Meanwhile, BDO’s non-interest income reached P60.6 billion last year, mainly on the back of fee-based income and insurance premiums which reached P35.3 billion and P14.8 billion, respectively. Gains from trading and foreign exchange stood at P5.7 billion.

BDO said its gross operating income inched up to P180.5 billion overall.

The lender’s capital base grew to P370.6 billion. Its capital adequacy ratio stood at 14.2%, while its common equity Tier 1 ratio was at 12.7%, both well above the required regulatory levels.

“Moving forward, BDO’s robust business franchise, extensive distribution network, solid balance sheet and focused growth strategy place the bank in an advantageous position to tap growth opportunities and development thrusts in line with government priorities while remaining resilient to domestic and external challenges,” the bank said in the statement.

BDO raised P35 billion through fixed-rate peso bonds in February to support its business expansion and to diversify its funding sources. The papers have a yield of 6.42% per annum to be paid quarterly until July 2020.

The lender’s shares ended trading at P143 apiece on Thursday, up by P6 or 4.38% from Wednesday’s finish. — Luz Wendy T. Noble