BDO likely surpassed P38.5 billion profit target for 2019

MANILA, Philippines — BDO Unibank Inc. may exceed its record high P38.5 billion profit target last year after a strong performance from January to September.

“While our audited full-year results are not yet available, we are on track to meet if not surpass our guidance given our first nine months results,” BDO president and chief executive officer Nestor Tan said.

The bank’s net income zoomed by nearly 50 percent to P32.1 billion during the nine-month period from P21.5 billion in the same period in 2018, driven largely by the expansion in the bank’s recurring core revenues.

The bank’s earnings from January to September last year almost matched its record high net income of P32.7 billion in 2018. It recorded an 18 percent rise in profit to a record P38.5 billion for 2019.

The bank’s loan book increased by about six percent to P2.1 trillion during the nine-month period from around P2 trillion in the same period in 2018, led by the sustained growth in the middle-market and consumer segments.

On the other hand, the bank’s deposit base inched up by three percent to P2.4 trillion from P2.3 trillion, with low-cost current account and savings account (CASA) deposits increasing by six percent.

The bank said its net Interest Income grew by 23.8 percent to P88.5 billion translating to a higher net interest margin, while non-interest Income went up by 23.2 percent to P44.1 billion with fee-based income increasing by 14 percent and insurance premiums jumping 23 percent.

Meanwhile, the bank’s trading and foreign exchange gains amounted to P4.3 billion, reflecting a normalized level compared to 2018, where a more volatile environment prevailed.

Overall, the country’s largest lender said its gross operating income rose by 23.6 percent to P132.6 billion, while operating expenses grew by 20 percent to P85.8 billion given its continuing expansion as well as increased volume-related expenses such as taxes and licenses and policy reserves at BDO Life.

Tan is confident the strong performance of the country’s largest lender last year would be sustained this year.

“No guidance yet for 2020, but we expect to sustain good growth this year,” he said.

Tan is optimistic about the prospects of the banking sector this year amid the country’s sound macroeconomic fundamentals.