By James A. Loyola
BDO Leasing and Finance, Inc. (BDOLF) posted a slight decline in revenues to P1.54 billion in the first half of 2019 compared from the P1.58 billion registered in the same period last year.
The firm said loans and receivables amounted to P28.7 billion, largely due to the sale of a portion of its lower-yielding portfolio earlier this year to mitigate the impact of compressed margins.
These resulted as funding costs, which increased substantially with the rapid rise in interest rates last year, adjusted faster than asset yields.
“It should be noted that the company’s earning assets typically carry fixed interest rates for three to five years, which is customary for lease transactions, while funding is via short-term commercial papers and bank loans,” BDOLF said.
As such, BDOLF registered a net loss of P28.8 million during the period.
“This is seen as a temporary situation, as the sale of the company’s lower-yielding portfolio, combined with the application of prevailing interest rates to new loan bookings and the re-pricing of existing loans, is expected to result in a recovery in margins in the second half of 2019,” it added.