MANILA, Philippines — BDO Unibank Inc. delivered the promised record profit of P28.1 billion last year on strong growth across all business segments, about seven percent higher than the P26.09 billion recorded in 2016.
The country’s largest bank owned by retail and banking magnate Henry Sy registered a 15 percent jump in core earnings, excluding consolidation effects of its life insurance business.
The listed bank booked solid growth in loans, low-cost deposits and fee-based income.
“The sustained expansion in lending, deposit-taking, and fee-based business drove the bank’s solid performance last year,” BDO said in a statement.
The bank’s net interest income jumped 25 percent to P81.8 billion after its loan book went up 18 percent to P1.8 trillion on broad-based increases across all loan segments.
Despite the increase in its loan portfolio, BDO said its gross non-performing loan (NPL) ratio improved to 1.2 percent last year from 1.3 percent in 2016, while its NPL cover improved to 146 percent from 139 percent.
BDO’s deposit base booked a double-digit growth of 11 percent to P2.1 trillion as low-cost checking and savings account deposits increased 11 percent.
Fee-based income surged 30 percent to P28.9 percent and translated to a 13 percent rise in non-interest income to P47.2 billion. Likewise, insurance premiums rose 23 percent to P9.9 billion.
The largest lender in the country’s gross income went up 20 percent to P129 billion despite the 20 percent drop in trading and foreign exchange gains to P3.9 billion given the challenging market conditions.
BDO registered a 21 percent jump in operating expenses to P84.9 billion amid continuing investments in branch network and strategic initiatives.
It opened 76 branches last year bringing its total footprint to 1,180 branches and 4,000 ATMs nationwide, the largest distribution network in the country. It also has 26 overseas remittance and representative offices in Asia, Europe, North America, and the Middle East.
The bank’s capital base stood at P298.3 billion translating to a capital adequacy ratio and common equity Tier-1 ratio of 14.5 percent and 12.9 percent, respectively. It raised P60 billion via a stock rights offering in January last year.
“For 2018, BDO believes that its focused growth strategy, robust business franchise, and solid balance sheet and capital base place the bank well-positioned to tap opportunities in growth sectors benefiting from the country’s favorable demographics and the government’s infrastructure build-up,” it said.
Meanwhile, the bank’s board of directors approved the extension of the term of BDO president and CEO Nestor Tan until March 2023. He has been serving as the bank’s president since June 1998 and CEO since April 2014.