BDO Unibank Inc., the country’s largest lender controlled by tycoon Henry Sy, plans to open 50 to 100 new branches next year, as a part of an aggressive expansion nationwide, a top executive said over the weekend.
BDO president Nestor Tan said the exact number of additional branches would depend on growth opportunities.
“We do not have a specific number, but if you look at our past history, maybe we are looking at between 50 and 100… but we don’t run on having so many,” Tan told reporters during the bank’s media appreciation party Friday evening in Makati City.
“What we do is that we look at which size makes sense. If it is more than a hundred, we roll out. If it’s less than 50, we roll out. So, you cannot foresee… it is to be driven by opportunities. The 50 to 100 is historical, every year. That is what we are anticipating,” Tan said.
Tan did not provide the specific amount to be spent for the establishment of each branch.
“It is substantial. We can’t disclose that but you have to appreciate that it varies by site, size and the nature of the branch… I’m not in a position to disclose that,” Tan said.
BDO has one of the largest distribution networks nationwide. It has more than 1,000 operating branches and over 3,000 automated teller machines, including those of the Davao-based One Network Bank, which it acquired in July.
It also has a branch in Hong Kong as well as 27 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.
Tan said the bank would assess its next move, after the recent establishment of a representative office in Dubai.
“We are just using Dubai as a rep office to service our requirements in the Middle East. So we will assess it, after we have stabilized that operation,” Tan said.
BDO posted a 5.4-percent increase in net income in the first nine months to P17.6 billion from P16.7 billion a year ago, on the strength of its core businesses.
Total deposits increased 12 percent to P1.6 trillion, led by the 16-percent hike in low-cost deposits. As such, net interest income rose 12 percent year-on-year to P41.8 billion.
The third-quarter results incorporated the completion of BDO’s acquisition of One Network Bank in July this year, adding over P20 billion to BDO’s total loans and deposits.
The bank’s fee-based service income contributed P13.9 billion to non-interest income, followed by trading and foreign exchange income at P6.3 billion. Overall, BDO’s gross operating income went up by 11 percent to P65.6 billion.
BDO said despite the increased business volumes and sustained branch expansion, it managed the growth of its operating expenses at 11 percent.
BDO prudently managed its balance sheet and set aside provisions amounting to P2.7 billion. Gross non-performing loan ratio stood at 1.2 percent, compared to 1.4 percent a year-ago while NPL cover settled at 182 percent, after the consolidation of ONB.
The bank’s total capital increased to P192 billion, with both the capital adequacy ratio and common equity Tier 1 ratio comfortably above the regulatory minimum under the Basel III framework at 13.4 percent and 11.4 percent, respectively.
BDO completed the acquisition of Davao City-based One Network Bank Inc. in July this year. ONB, the largest rural bank in the country in terms of assets, has 105 branches and micro-banking offices in Mindanao and Panay Island.