BDO earnings outlook less rosy in 2025 despite Q1 growth

Sy family's BDO Unibank Inc. is projecting a less rosy picture for the banking giant's bottom line this year amid the easing of interest rates, despite posting modest growth in the first quarter.

At a press briefing in Pasay City on Friday, BDO president and CEO Nestor Tan reported that the SM Group's banking arm posted a net income of P19.7 billion in the January to March period, up 7% from P18.5 billion year-on-year.

"The 7% growth in the first quarter was actually affected by uncertainty," Tan said, citing challenges arising from foreign exchange volatility and lower interest rates.

Moreover, BDO's first quarter performance was driven by the 12% growth in customer loans to P3.3 trillion and 6% increase in deposits to P3.8 trillion.

Nonetheless, he said, "don't look at the first quarter as indicative of the full year… don't look at the first quarter as indicative of the full year."

In 2024, the Sy-led lender saw its bottom line rise by 12% to P82 billion from P73.4 billion in 2023.

Tan, however, indicated that the 12% net income growth seen last year will not be replicated in 2025.

"It will be a little less [than last year's]. It is because of the expected decline in interest rates… spreads will be affected," he said.

"It will still have growth, but probably not on the same level as last year," he added.

In its April policy meeting, the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board resumed its easing cycle by reducing key interest rates by 25 basis points.

The BSP reduced rates by a total of 75 basis points last year—25 basis points each in August, October, and December.

For 2025, the BSP signaled further 25 basis points rate cuts at a time throughout the year.

Tan said BDO is expecting a total of 50 basis points more rate cuts to be implemented in 2025.

The BDO chief, meanwhile, said that despite economic uncertainties arising from US President Donald Trump's tariff policy, the Philippines is expected to remain resilient being a domestic and consumption-driven economy.

"Generally the tariff will have an impact but not as much as the other countries," Tan said.

He said that BDO remains well-positioned to navigate potential risks and achieve sustainable profitability with its strong business franchise, market dominance, and robust capital position. — VDV, GMA Integrated News