By JAMES A. LOYOLA
BDO Unibank, Inc. (BDO) reported a 35 percent surge in net income to ₱44.2 billion last year from ₱32.7 billion in 2018 on the strong performance of its core recurring income sources.
In a disclosure to the Philippine Stock Exchange, the bank said the results exceeded its ₱38.5-billion guidance and translate to a Return on Common Equity (ROCE) of 12.8 percent from 10.7 percent the year before.
Net interest income went up 22 percent to ₱119.9 billion from ₱98.3 billion as net interest margin (NIM) improved on continued CASA (Current Account/Savings Account) growth and improving loan mix in favor of consumer and middle market customers.
Customer loans rose by nine percent to ₱2.2 trillion on broad-based growth across market segments. Total deposits grew by three percent to ₱2.5 trillion, bolstered by the eight percent increase in low-cost CASA deposits that comprised 73 percent of total deposits.
Non-interest income reached ₱60.6 billion, led by fee-based income with ₱35.3 billion and insurance premiums with ₱14.8 billion. Trading and forex gains settled at ₱5.7 billion. Overall, gross operating income went up to ₱180.5 billion.
Operating expenses amounted to ₱115.2 billion, in line with the Bank’s continuing business and network expansion, as well as higher volume-related expenses (specifically, taxes and licenses and policy reserves at BDO Life).
The Bank maintained its conservative credit and provisioning policies, setting aside ₱6.2 billion in provisions, even as gross non-performing loan (NPL) ratio was steady at 1.2 percent and NPL cover remained high at 164.7 percent.
Total capital base increased to ₱370.6 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio at 14.2 percent and 12.7 percent, respectively, both comfortably above regulatory levels.
Moving forward, the bank said its robust business franchise, extensive distribution network, solid balance sheet and focused growth strategy place the Bank in an advantageous position to tap growth opportunities and development thrusts in line with government priorities while remaining resilient to domestic and external challenges.