BDO earns record P28.1 billion net income in 2017

BDO Unibank Inc. reported on Monday an all-time high net income of P28.1 billion in 2017, up 7 percent year-on-year, supported by growth across all business segments.

The bank’s financial results match its earnings guidance for last year.

“Excluding consolidation effects of the life insurance business, however, this represented a strong 15 percent jump in core earnings on the back of solid growth in loans, low-cost deposits and fee-income,” the bank noted.  

Customer loans rose by 18 percent to P1.8 trillion on broad-based increases across all loan segments, while total deposits were up 11 percent at P2.1 trillion, led by the 12-percent growth in low-cost CASA (current and savings accounts) deposits—comprising 73 per cent of total deposits.

Net interest income rose by 25 percent to P81.8 billion.

Non-interest income contributed P47.2 billion, up 13 percent, with fee-based income accounting for P28.9 billion for a 30 percent expansion.

Insurance premiums were up 23 percent at P9.9 billion.

“These compensated for the expected 20 percent decline in trading and forex gains to P3.9 billion, given the challenging market conditions. Overall, gross operating income advanced by 20 percent to P129.0 billion,” the bank said.

Operating expenses rose by 21 percent to P84.9 billion. Excluding extraordinary items, operating expenses would have increased by 15 percent, reflecting BDO’s continuing investments in branch network and strategic initiatives, the bank said.

BDO added 76 branches last year that brought the total consolidated branches, including the Hong Kong branch, to 1,180 in 2017.

The bank said it set aside P6.5 billion to cover required provisioning associated with the change in loan loss methodology to expected credit losses (ECL) related to regulatory requirements.

Gross nonperforming loan (NPL) ratio improved at 1.2 percent, from 1.3 percent as of end-2016. NPL cover reached 146 percent from 139 percent.

The bank’s capital base stood at P298.3 billion, with a capital adequacy ratio (CAR) of 14.5 percent and common equity tier 1 (CET1) ratio at 12.9 percent—both well above regulatory levels.

BDO raised P60 billion in fresh equity via a stock rights offer in January 2017.

With its focused growth strategy, robust business, and solid balance sheet and capital base, the bank is well-positioned to tap opportunities in growth sectors benefiting from the country’s favorable demographics and the government’s infrastructure build-up, the bank said. —VDS, GMA News