BDO profits in first half of 2020 plunge to P4.3 billion

Sy-led lender BDO Unibank Inc. saw its profits fall to nearly a fifth in the first semester of the year from the same period in 2019, as it booked higher provisions in anticipation of potential delinquencies due to the coronavirus pandemic.

In a regulatory filing, BDO said it booked P4.3 billion in profits in the January to June period, down by 78.60% from P20.1 billion in the same period last year.

This comes as the bank booked total provisions of P22.4 billion during the period, which the bank undertook to maintain its balance sheet.

"The provisions are anticipatory in nature, and meant to safeguard the balance sheet," it said.

"By recognizing the provisions upfront, the bank can now focus on growing its business as restrictions under ECQ/GCQ are gradually relaxed," it added.

The Philippine economy was placed at a standstill in March to May, when Metro Manila and other "high-risk" areas were placed under an enhanced community quarantine (ECQ) from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.

Looser restrictions have since been in place under the general community quarantine (GCQ) which was implemented starting June 1, and extended to last until July 31.

According to BDO, its gross non-performing loan (NPL) ratio during the six-month period increased to 1.95%, while its NPL cover settled at 139.4%.

"Going forward, BDO believes that its solid balance sheet, sustained business growth, and dedicated team effort will allow the bank to weather the COVID-19 crisis and sustain its long-term performance post-pandemic," it said.

BDO ended 2019 as the Philippines' largest bank in terms of assets with P3.069 trillion. —KG, GMA News