BDO’s income jumped by 41% to P16.5b in Q1

BDO Unibank Inc., the country’s largest lender led by the Sy Group, said Tuesday net income in the first quarter jumped 41 percent to P16.5 billion from P11.7 billion a year ago on the back of broad-based growth across businesses.

BDO said in a disclosure to the stock exchange return on average common equity improved to 14.45 percent from 11.09 percent in the same period last year.

“While macroeconomic challenges persist with still elevated inflation and interest rates, the bank believes it is in a good position to weather short-term volatility and capitalize on long-term growth opportunities given its sound balance sheet, established business franchise and strong and diversified earnings streams,” it said in a statement.

Gross customer loans increased 8 percent to P2.6 trillion, while total deposits expanded 14 percent to P3.2 trillion.

BDO said that given the uncertainty, it maintained a healthy balance between loan growth and sufficient liquidity for unforeseen events, maintaining its liquidity ratio at 35 percent.

Net interest income grew to P43.4 billion, while non-interest income rose to P18.9 billion, bolstered by solid growth in the various fee-based and treasury/foreign exchange businesses.

Operating expenses went up by 17 percent, mainly from volume-related costs such as credit card interchange fees, documentary stamp taxes and gross receipt taxes, consistent with increased activity.

The bank also sustained its IT investments and branch expansion with 97 new branches opened since the first quarter of 2022. Revenue growth continued to outpace operating expenses growth, resulting in pre-provision operating profit accelerating to P24.9 billion.

Non-performing loan ratio improved to 1.98 percent from 2.72 percent a year ago, while NPL coverage increased from 120 percent to 170 percent year-on-year, as the bank maintained its conservative credit and provisioning policies.

Capital base strengthened to P475.9 billion, with capital adequacy ratio and common equity tier 1 ratio at 14.8 percent and 13.7 percent, respectively, both comfortably above regulatory minimum levels.

Book value per share rose by 10.5 percent year-on-year to P88.81.

BDO solidified its industry leadership following a 33.4-percent increase in net income last year to a record P57.1 billion from P42.8 billion a year ago. The bank managed to sustain its profitability amid a very challenging business environment due to higher interest rates and inflation.

The 2022 results led to a return on average common equity of 13 percent, improving to 15.3 percent for the fourth quarter from 10.5 percent in 2021 and 12.8 percent in 2019 before the onslaught of the pandemic.