DAVAO CITY, Philippines – The BDO Unibank, Inc. said its core earnings have increased to 16 percent in the first six months of this year, saying that the bank’s net earnings during the period have reached to P13.3 billion.
In a statement to the media on Monday, BDO attributed its net income from the expansion of its loan portfolio, the growth in low-cost deposits and higher recurring fee-based service income.
“Excluding the extraordinary items from the consolidation of newly acquired subsidiary BDO Life last year, this represents a strong 16 percent growth in core earnings,” the bank added.
During the period, BDO’s customer loans increased by 17 percent to P 1.6 trillion, while its total deposits rose to almost P2.0 trillion which is supported by the 17 percent jump in low-cost CASA deposits and now comprising 73 percent of the bank’s total deposits.
The result, it said, is the bank’s net interest income that went up by 22 percent to P38.6 billion in the same period this year.
BDO also reported that its non-interest income also rose to P23.2 billion that is driven by fee-based service income.
“On a comparable basis, fee-based income rose by 13 percent. Insurance premiums advanced by 17 percent to P4.6 billion, while Trading and forex gains declined 21 percent to P2.6 billion from P3.2 billion a year-ago,” the bank said.
It also reported on the increase of its operating expenses by 20 percent due to its aggressive drive to grow its core business along with investments in new markets.
“Excluding extraordinary items and the consolidation effects of ONB (One Network Bank) and BDO Life, operating expenses would have risen by only 14 percent,” it said, adding that the bank “prudently set aside provisions of P2.9 billion even as asset quality remained benign with gross non-performing loan (NPL) ratio steady at 1.3 percent, and NPL cover at 137 percent.”
BDO’s capital base also expanded to P289 billion with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 Ratio at 15.7 percent and 14.0 percent, respectively following its successful P60 billion (USD1.2 billion) stock rights offer in January 2017.
Retained earnings from profitable operations also contributed to the increase of its capital base, it added.
“Looking ahead, BDO will continue to leverage on its robust business franchise and build on its key initiatives to capture new growth opportunities and solidify its market leadership,” BDO said. (davaotoday.com)