BDO Unibank, Inc. (BDO) recorded a net income of P44.2 billion in 2019 from P32.7 billion in 2018 on the strong performance of its core recurring income sources. The results exceeded the bank’s P38.5 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 to P119.9 billion from P98.3 billion. Net Interest Margin (NIM) improved on continued CASA growth and improving loan mix in favor of consumer and middle market customers. Customer loans rose by 9 percent to P2.2 trillion on broad-based growth across market segments. Total deposits grew by 3 percent to P2.5 trillion, bolstered by the 8 percent increase in low-cost Current Account/Savings Account (CASA) deposits that comprised 73 percent of total deposits.
Non-interest income reached P60.6 billion, led by fee-based income with P35.3 billion and insurance premiums with P14.8 billion. Trading and forex gains settled at P5.7 billion. Overall, gross operating income went up to P180.5 billion.
Operating expenses amounted to P115.2 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 P6.2 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 P370.6 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, BDO’s 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. (PR)