BDO Unibank, Inc. (BDO) grew its net income to P40.0 billion in the first nine months of 2022 vs. P32.4 billion in the comparative period last year on solid results across its core businesses. This translates to a Return on Average Common Equity (ROCE) of 12.4%, compared to 10.7% posted a year-ago.
Gross customer loans went up by 10% year-on-year (YoY), largely funded by low-cost Current Account/Savings Account (CASA) deposits. Due to its high CASA base, net interest income increased to P108.1 billion.
Non-interest income rose to P53.2 billion led by 20% expansion in fees and insurance premiums, while trading and forex gains were broadly in line with expectation and primarily generated by flow-related business. Gross operating income amounted to P161.3 billion.
Operating expenses (OPEX) rose to P98.1 billion, as the Bank continued its branch expansion activities in underserved markets in the rural areas, and sustained Information Technology (IT) spend to support its digital initiatives.
Asset quality improved as the Bank’s NPL ratio went down further to 2.23%. Still, the Bank maintained its conservative provisioning policy by setting aside provisions of P12.2 billion, resulting in a higher NPL coverage of 152%.
Total capital increased to ₱444.6 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) Ratio both comfortably above regulatory minimum at 14.4% and 13.3%, respectively.
The Bank has opened a total of 64 branches this year, most of which are in rural areas covered by its subsidiary BDO Network Bank Inc. This brings the Bank’s total branches to 1,608 as of September 30, 2022. This is part of the Bank’s initiative to help improve financial inclusion, by providing access to financial services in less dense areas.
Despite the Bank’s strong performance year to date, management is conscious of external headwinds brought about by slowing global growth, persistent inflation, and lingering uncertainties related to the Covid-19 pandemic. BDO nonetheless believes that its established business franchise and strong balance sheet allows the Bank to overcome near-term risks and achieve long-term sustainable growth.