BDO earns record P28.1 billion in 2017
BDO Unibank, Inc. (BDO) reported an all-time high net income of Php 28.1 billion in 2017 on strong growth across all business segments, matching the bank’s earnings guidance and marking a seven percent rise year-on-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.
Scenes from the recently-concluded BDO Economic Briefing./PRIMER FILE PHOTO
The sustained expansion in lending, deposit-taking, and fee-based businesses drove the bank’s solid performance last year. Customer loans rose by 18 percent to Php 1.8 trillion on broad-based increases across all loan segments, while total deposits went up by 11 percent to Php 2.1 trillion, led by the 12 percent growth in low-cost CASA deposits (comprising 73 percent of total deposits). As a result, net interest income rose by 25 percent to Php 81.8 billion.
Non-interest income contributed Php 47.2 billion, higher by 13 percent, with fee-based income accounting for Php 28.9 billion for a 30 percent expansion. In addition, insurance premiums went up by 23 percent to Php 9.9 billion. These compensated for the expected 20 percent decline in trading and forex gains to Php 3.9 billion given the challenging market conditions. Overall, gross operating income advanced by 20 percent to Php 129.0 billion.
Meanwhile, operating expenses rose by 21 percent to Php 84.9 billion. However, excluding extraordinary items, operating expenses would have increased by 15 percent, reflecting BDO’s continuing investments in its branch network and strategic initiatives. BDO added 76 branches, bringing total consolidated branches (including HK branch) to 1,180, in 2017.
The Bank set aside higher provisions amounting to Php 6.5 billion to cover required provisioning associated with the change in loan loss methodology to Expected Credit Losses (ECL) related to BSP Circular 855 and IFRS9. Gross non-performing loan (NPL) ratio improved to 1.2 percent from 1.3 percent as of end-2016. NPL cover improved to 146 percent from 139 percent in 2016.
The Bank’s capital base stood at P298.3 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio at 14.5 percent and 12.9 percent, respectively, both well above regulatory levels. The Bank had raised Php 60 billion in fresh equity via a stock rights offer (SRO) in January 2017.
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.
This is a press release from BDO.
