SM Group allots P12 B for BDO, China Bank capex

MANILA, Philippines — The family of the late retail magnate Henry Sy, through flagship SM Investments Corp. (SMIC), is spending as much as P12 billion to finance the expansion of their banking empire.

The SM Group has allocated up to P12 billion to finance the capital expenditures of both BDO Unibank Inc. and China Banking Corp., accounting for more than nine to 12 percent of the P98 billion budget for this year.

BDO corporate information officer Elmer Serrano said in a disclosure to the Philippine Stock Exchange (PSE) the capital expenditure budget of the country’s largest lender for branch expansion and information technology enhancements is approximately P8 billion for 2019.

Sy’s empire controls both BDO and China Bank. BDO is the country’s largest bank in terms of assets, capital, deposits and loans based on statistics by the Bangko Sentral ng Pilipinas.

Earnings of BDO went up by 17 percent to a record P32.7 billion last year from P28.1 billion in 2017, topping the bank’s profit guidance of P31 billion on strong recurring earnings from its core businesses.

It booked a 15 percent increase in its loan book to P2 trillion due to healthy increases across all market segments, while its deposit base grew by 14 percent to P2.4 trillion.

On the other hand, China Bank climbed seven percent to a record net income of P8.1 billion last year from P7.4 billion in 2017 amid the sustained strong growth of its core businesses.

China Bank’s loan book rose to P513 billion amid the 20 percent rise in consumer loans and 18 percent increase in corporate lending, while its deposit base expanded by 14 percent to P722.1 billion.

Last year, BDO opened 77 new branches while China Bank inaugurated 24.

Aside from banking and financial services, Sy’s business interests also cover retail, property, mining and gaming, among others.