BDO Unibank, Inc. (BDO) sustained its momentum as it delivered P20.2 billion in earnings for the first six months of the year on strong recurring earnings from its core businesses, solid growth in fee income and normalization of trading & forex gains.
Net interest income increased by 24% to P56.9 billion as net interest margins (NIMs) improved to 3.99 per cent from 3.50 per cent last year. Gross customer loans grew by seven (7) per cent to P2.0 trillion, as the Bank continued to generate double-digit growth in the consumer and middle market segments. Meanwhile, total deposits went up by three (3) per cent to P2.4 trillion, reflective of customers’ shift to higher-yielding fixed income investments, primarily bank-issued bonds. The Bank’s CASA ratio, however, was maintained at 70 percent.
Non-interest income was up 29 per cent to P29.5 billion as fee-based income and insurance premiums posted double-digit growth. Further, trading and forex gains normalized to P3.6 billion on favorable capital market conditions.
Operating expenses grew by 21 per cent in line with the Bank’s continuing expansion, with 53 domestic branches and offices opened in the 1H 2019, as well as higher volume-related expenses. Taxes and licenses and policy reserves at BDO Life increased by 51 per cent. Excluding volume-related expenses, opex growth would have risen by 14 per cent in line with the Bank’s investment in branches and business development offices nationwide.
Provisions amounted to P3.0 billion as the Bank maintained its conservative credit and provisioning policies. Gross non-performing loan (NPL) ratio was steady at 1.2 per cent while NPL cover remained high at 163.2 per cent.
Total capital grew to P350.8 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 Ratio at 14.2 per cent and 12.6 per cent, respectively, higher quarter-on-quarter and remaining comfortably above regulatory requirements.
With expectations of better economic prospects going forward, BDO will continue to build on its business franchise and extensive distribution network to tap new growth areas and underserved markets.