BDO earnings double to P32.4 billion in 9 months

MANILA, Philippines — The net income of Sy-led BDO Unibank Inc. returned to pre-pandemic levels, almost doubling to P32.48 billion from January to September compared to last year’s P16.6 billion despite the double-digit decline in earnings in the third quarter.

Amid the drop in lending rates as well as the interest rate cap imposed by the Bangko Sentral ng Pilipinas (BSP) on credit card receivables, the net interest income of the country’s largest lender slipped by 2.3 percent to P97.55 billion from P99.82 billion.

During the nine-month period, the bank’s interest earnings declined by 9.6 percent to P107.93 billion from P119.38 billion as net interest margin fell to 4.05 percent from 4.36 percent, while interest expense on deposit liabilities plunged by 46.9 percent to P10.38 billion from P19.56 billion.

BDO’s other operating income went up by 12.8 percent to P44.46 billion from January to September compared to a year-ago level of P39.51 billion as foreign exchange gains mainly from overseas remittances and customer flows tripled to P2.95 billion from P971 million.

Likewise, the bank’s earnings from fees, charges and fees jumped by 23 percent to P21.33 billion from P17.4 billion amid the improvement across business lines, while insurance premiums surged 26 percent to P13.68 billion from P10.85 billion amid the higher business volumes of BDO Life.

On the other hand, the bank booked a P124 million trading loss during the nine-month period, reversing the P4.7-billion gain in the same period last year, due to adverse market movements.

The bank’s operating expenses increased by 5.2 percent to P80.86 billion during the nine-month period from P86.37 billion a year ago due to salary increases and benefits extended to employees due to the pandemic.

“More significantly, the bank has now vaccinated 95 percent of its employees against COVID, thus raising the level of safety for clients and bank personnel,” BDO said.

BDO’s provision for impairment losses was cut by more than half to P10.44 billion from January to September versus last year’s P23.83 billion as the amount earmarked for potential loan losses continued to normalize.

The bank’s loan book grew by five percent, while its deposit base rose by six percent during the nine-month period.

For the third quarter alone, BDO’s profit booked a double-digit decline of 10.6 percent to P11.03 billion from P12.35 billion in the same period last year. The provision for impairment losses soared by 162.8 percent to P3.66 billion from P1.39 billion.

The bank’s net interest income declined by five percent to P36.56 billion from July to September, while other operating income jumped by 19.8 percent to P14.78 billion. Other operating expenses went up by seven percent to P29.91 billion.

As more Filipinos embrace digitalization due to the global health crisis, BDO sustained investments in its information technology and digital infrastructure. It also expanded its digital capabilities to further elevate customer experience and raise productivity.

“The bank launched early this year its mobile wallet BDO Pay. In addition, BDO clients can now enjoy paperless in-branch transactions, card-less ATM transactions using biometrics and QR codes, and fully digital account opening,” it said.

As of end-September, BDO’s total assets stood at P3.5 trillion while its capital base strengthened to P422.3 billion, translating to a common equity tier 1 ratio of 13.8 percent and capital adequacy ratio of 14.87 percent.

BDO has the country’s largest distribution network, with over 1,500 consolidated operating branches and more than 4,400 ATMs nationwide. It also has 15 international offices, including full-service branches in Hong Kong and Singapore in Asia, Europe, North America and the Middle East.