BDO eyes 5%-10% 2022 net income growth

Philippines’ biggest bank, the Sy-controlled BDO Unibank Inc., is projecting a five to 10 percent net income growth in 2022 or around P45 billion to P47 billion, according to its President and CEO, Nestor V. Tan.

This is a modest estimate from its 2021 growth of 51 percent over 2020. Last year, the bank earned P42.8 billion.


“Outlook for the rest of 2022 remains cautiously optimistic. Business is improving with stronger loan demand and fee income generation. Outlook for asset quality is improving and the macroeconomic environment looks more positive,” said Tan during the bank’s annual stockholders’ meeting on Friday, April 22.

“We believe we’re now moving into the post pandemic environment,” he also said.

Tan said BDO has a generally mixed outlook for this year, on the back of a forecasted six percent expansion in GDP, an apparent controlled Covid-19 spread due to vaccine coverage and the return of mobility. The outlook is mixed because inflation is rising, driven by supply chain disruptions and geopolitical conflicts.

“We expect improvements in our operations to continue and we anticipate a five to 10 percent improvement in profits,” said Tan.

In the first three months of 2022, BDO posted a net income of P11.7 billion, up 13 percent year-on-year. Based on the first quarter performance, the bank is confident of its ability to expand its business in the years ahead on the back of its strong financial position.

“Overall, we continue to grow our balance sheet and net income in the first quarter of 2022. All key indicators are trending positively,” said Tan, adding that the first quarter “bodes well for the future with higher profitability, better asset quality and stronger capital adequacy.”

In a nutshell, Tan said loan growth is expected to expand by eight percent to 12 percent this year with relatively stable margins. “Asset quality appears to be under control and delinquencies are normalizing. Fee income momentum is expected to continue. Digital infrastructure for the bank is now largely completed, new capabilities are expected to be rolled out gradually,” he said. With increasing loan demand, this will sustain business performance while the improving asset quality meant higher bad loans coverage ratio for the bank and the industry.

However, he reiterated that in 2022, and since there is still a pandemic, uncertainties abound. The May 9 national elections and its results, as well as the ongoing Russia-Ukraine war are also factors to an uncertain year.

“We are not sure whether we have finally shaken Covid (while) the elections would clearly bring different expectations and different policies,” said Tan.

Meantime, he said businesses’ investments have paused and the geopolitical tensions in Eastern Europe has taken a toll on energy prices, the global supply chain and inflation expectations.

During the stockholders’ meeting, BDO Chairperson, Teresita Sy-Coson, said the 2021 performance for the bank shows BDO’s resiliency and agility as an organization.

“Our net income last year was 97 percent of pre-pandemic levels, and we carry a good momentum heading into 2022,” said Sy-Coson.

“As we embraced the changes brought about by the health crisis, BDO created new ways to better serve our clients’ changing banking needs. We have enhanced our clients’ customer journey, by digitizing and simplifying our services and processes, making them more efficient, fast and user-friendly,” she added.

Sy-Coson promised BDO investors and clients that they will “continue to strengthen (BDO’s) business strategy and sustain its digital innovations, as it expands its reach especially in the underserved markets.”

In the same meeting, BDO stockholders approved the declaration of stock dividends equivalent to 20 percent of the bank’s outstanding capital stock, as well as an increase in the bank’s authorized capital stock or common shares from 5,500,000,000 to 8,500,000,000 shares.

The BDO board also approved a P1 special cash dividend on the bank’s common shares, set on May 6 with a payment date of May 31, 2022.

BDO has a network of 1,500 branches with 16 international offices. In Hong Kong and Singapore, it operates full-service branches.

BDO is the country’s largest lender in asset-size, as well as in terms of volume of its loans, deposits and trust funds under management.