BDO Unibank Inc., the country’s largest lender controlled by the Sy Group, said Friday net income in the first six months of 2019 jumped 53 percent P20.2 billion from P13.1 billion year-on-year.
The bank attributed the higher profit to strong recurring earnings from its core businesses, solid growth in fee income and normalization of trading and forex gains.
The bank’s net interest income increased 24 percent to P56.9 billion as net interest margins improved to 3.99 percent from 3.50 percent last year.
Gross customer loans grew 7 percent to P2 trillion, as the bank continued to generate double-digit growth in the consumer and middle market segments.
Meanwhile, total deposits rose 3 percent to P2.4 trillion, reflective of customers’ shift to higher-yielding fixed income investments, primarily bank-issued bonds.
BDO’s s CASA ratio, however, stood at 70 percent.
The bank’s non-interest income was up 29 percent to P29.5 billion as fee-based income and insurance premiums posted double-digit growth, while trading and forex gains normalized to P3.6 billion on favorable capital market conditions.
Operating expenses increased 21 percent in line with the bank’s continuing expansion, with 53 domestic branches and offices opened in the first half of 2019, as well as higher volume-related expenses.
Taxes and licenses and policy reserves at BDO life increased 51 percent.
Excluding volume-related expenses, operation expenses growth would have risen by 14 percent in line with the bank’s investment in branches and business development offices nationwide.
Provisions amounted to P3 billion as the bank maintained its conservative credit and provisioning policies. The gross non-performing loan ratio was steady at 1.2 percent, while NPL cover remained high at 163.2 percent.
Total capital grew to P350.8 billion, with capital adequacy ratio from common equity tier 1 ratio at 14.2 percent and 12.6 percent, 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,” the bank said.