Operating expenses increased by 29 percent to P52.8 billion, which reflects the consolidation of One Network Bank and BDO Life Insurance operations. On a comparable basis net of these new businesses, operating expenses would have grown by only 12 percent in line with the Bank’s continued business expansion.”—BDO
Sy-led BDO Unibank (BDO) posted higher net earnings for the January-to-September period on the back of the bank’s core lending, deposit-taking and fee-based businesses.
In a regulatory filing, the lender reported a 10-percent year-on-year increase in net income to P19.3 billion in the first nine months of the year.
Net interest income grew 16 percent to P48.4 billion, while its customer loan portfolio expanded by 15 percent to P1.4 trillion on broad-based growth across all market segments.
Meanwhile, total deposits rose 14 percent to P1.8 trillion, supported by the 21-percent increase in low-cost current account, saving account deposits, which now comprise 70 percent of total deposits.
“Operating expenses increased by 29 percent to P52.8 billion, which reflects the consolidation of One Network Bank and BDO Life Insurance operations. On a comparable basis net of these new businesses, operating expenses would have grown by only 12 percent in line with the bank’s continued business expansion,” BDO told the Philippine Stock Exchange.
The Sy-led lender reported its fee-based income grew by 15 percent to P16 billion, while trading and foreign-exchange income normalized to P4.5 billion, or a decline of 29 percent.
Furthermore, the bank set aside P2.6 billion in provisions even as asset quality held firm. Gross nonperforming loan (NPL) ratio was steady at 1.3 percent, while NPL cover remained high at 143 percent.
BDO’s capital base stood at P215.4 billion, with Common Equity Tier 1 (CET1) and Capital Adequacy Ratio (CAR) both remaining above the current regulatory minimum set by the Bangko Sentral ng Pilipinas.
BDO issued last month $300 million in fixed-rate senior notes at 2.63 percent, the lowest ever coupon rate for any US dollar denominated bond for a Philippine issuer.
The lender recently announced a plan to raise P60 billion in additional core capital through a stock-rights offer.
“The fresh capital will support the BDO’s medium-term growth objectives amid the country’s favorable macroeconomic prospects, and provide a comfortable buffer over higher capital requirements with the forthcoming imposition of the Domestic Systemically Important Bank surcharge,” the bank said.
As of end June, BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition.