BDO profit hits record P26.1 B in 2016

MANILA, Philippines - Listed BDO Unibank Inc., the country’s largest bank, delivered promised earnings last year with a record P26.1 billion on the back of strong results across core businesses.

The latest figure was 4.4 percent higher than the P25 billion net income recorded in 2015.

“This matched the bank’s earnings guidance for last year and is a record net income for the bank,” BDO said in a statement.

The bank’s loan book jumped 16 percent to P1.5 trillion last year from P1.3 trillion in 2015 while its deposit base went up 15 percent to P1.9 trillion from P1.7 trillion.

The bank reported a 15-percent rise in net interest income to P65.6 billion from P57 billion while fee-based income went up 15 percent to P22.2 billion from P19.4 billion.

Likewise, BDO said insurance premium contributed P8 billion as efforts to diversify income stream has started to bear fruit.

Meanwhile, trading gains plunged to P4.8 billion.

BDO’s gross operating income surged 20.6 percent to P107.2 billion while expenses jumped 27 percent to P70.1 billion, primarily due to the consolidation of One Network Bank and BDO Life Insurance.

The bank said it set aside P3.8 billion in provisions for the year even as gross non-performing loan (NPL) ratio held steady at 1.3 percent while NPL cover remained high at 139 percent.

BDO’s capital base rose 8.7 percent to P217.5 billion from P200 billion. Its capital adequacy ratio (CAR) stood at 12.4 percent while its common equity tier 1 ratio stood at 10.7 percent.

Last month, BDO raised P60 billion through a stock rights offering boosting its consolidated CAR to an estimated 15.7 percent allowing it to support medium-term targets and provide a comfortable buffer over higher minimum capital requirements with the staggered implementation of the Domestic Systemically Important Bank surcharge by the Bangko Sentral ng Pilipinas.

“With a strengthened capital base, robust business franchise and extensive distribution network, BDO is well-positioned to benefit from the country’s growth momentum,” the bank said in a statement.

For this year, the Sy-led bank sees earnings growing 10 percent to a record P28.8 billion fueled by the country’s sustained economic growth.

BDO president and chief executive officer Nestor Tan earlier said demand for loans would continue to grow to fund economic activities as well as the plan of the Duterte administration to ramp up infrastructure spending.