BDO Unibank Inc., the largest lender in terms of assets controlled by tycoon Henry Sy, will put up a P100-billion peso bond program to fund growth and expansion plans.
BDO said in a disclosure to the stock exchange Monday its board of directors approved the planned bond program in a meeting on Friday.
“Please be informed that the board of directors of BDO Unibank Inc., at its regular board meeting held Aug. 31, 2018, approved the establishment of a peso bond program of up to P100 billion,” the bank said.
Luis Reyes Jr., head of BDO investor relations and corporate planning division, said there was no timetable yet for the bond issuance.
“While the program has been established, there is no definite timetable yet for an issuance under the approved peso bond program,” Reyes said in a statement.
The bank’s board also approved the declaration of regular cash dividends on common shares in the amount of P0.30 per share for the third quarter of 2018, payable on Sept. 28 to all stockholders of record as of Sept. 14, 2018.
BDO said the source of cash dividend payment was the surplus profit of the bank.
The bank remained the biggest in terms of assets, loans, and deposits as of the first half.
It posted a 1.5-percent decline in net income in the first semester to P13.1 billion from P13.3 billion a year ago, partially affected by the implementation of the Philippine Financial Reporting Standard-9.
BDO said excluding the impact of the new report standard, which was implemented early this year on the investment portfolio of BDO Life and the ongoing expansion of One Network Bank, net income would have increased 13 percent.
PFRS-9″•the local equivalent of IFRS-9″•took effect at the start of 2018. It requires banks to assess all future asset impairments by using expected loss models as opposed to as-incurred approach.
Net interest income remained the major earnings driver of BDO, accelerating 19 percent in the first half to almost P46.0 billion, driven by the hefty 20-percent jump in customer loans to P1.9 trillion on broad-based growth across all market segments.
Total deposits expanded 17 percent to P2.3 trillion.
Non-interest income amounted to P22.8 billion, lower by 2 percent year-on-year, as the 23-percent growth in insurance premiums to P5.6 billion and the 7-percent growth in fees and other income to P17.2 billion were offset by the unrealized mark-to-market losses on BDO Life’s portfolio.
Service charges and fees remained strong but was tempered by weak underwriting and syndication activities in the capital markets. Overall, gross operating income grew 11 percent to P68.8 billion.
The bank remained prudent as it boosted provisions to P3.5 billion even as gross non-performing loan ratio eased to 1.2 percent from 1.3 percent. NPL cover increased year-on-year to 158 percent from 137.2 percent.
Total capital grew to P303 billion, with capital adequacy ratio and common equity tier 1 ratio at 14 percent and 12.4 percent, respectively.
BDO is aiming for a record P31-billion net income this year following a remarkable performance in 2017.
