BDO Unibank set new record with over $1-b income in 2022

BDO Unibank Inc. set a new record among private companies in the Philippines with a net income of over $1 billion in 2022 despite the challenging business environment highlighted by higher interest rates and elevated inflation.

The banking unit of the Sy Group said Monday profit climbed 33.4 percent last year to a record P57.1 billion from P42.8 billion in 2021 on the sustained strength of core businesses. The peso closed at 55.51 against the US dollar Monday.

“While macroeconomic challenges remain with persistent inflation and foreign exchange and interest rate volatility, BDO believes that its established business franchise and strong balance sheet will allow the bank to surmount near-term risks and capitalize on structural growth opportunities to attain long-term sustainable growth,” BDO said in a disclosure to the stock exchange.

The 2022 results led to a return on average common equity of 13 percent, improving to 15.3 percent for the fourth quarter, from 10.5 percent in 2021 and 12.8 percent in 2019 before the onslaught of the pandemic.

The economic reopening triggered a 9-percent growth in gross customer loans. Total deposits also climbed 14 percent, with net interest income growing by 14 percent to P149.2 billion.

Non-interest income rose 17 percent to P71.5 billion on the strong performance of fee income, foreign exchange and fixed income client-flow businesses.

Asset quality improved, with non-performing loan ratio declining to 1.95 percent and NPL coverage strengthening to 167 percent.

Total capital expanded to P461.5 billion, with capital adequacy ratio and common equity tier 1 ratio both comfortably above regulatory minimum levels at 14.5 percent and 13.4 percent, respectively. Book value per share rose 9 percent to P86.20 year on year.

BDO’s board of directors approved an increase in the regular quarterly cash dividends on common shares to P0.75 per share beginning in the first quarter of 2023, payable on March 31, 2023. The bank said this would be the new dividend policy of BDO going forward.

“This higher dividend payout compares favorably with the P0.30 per share quarterly dividend in the past, as the bank recognizes the importance of providing a stable and sustainable dividend stream consistent with its commitment to shareholders, and its financial performance,” it said.

BDO is a full-service universal bank that provides a wide range of corporate and retail services such as traditional loan and deposit products, treasury, trust banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, cash cards, credit cards, and online and non-online brokerage services.

It has the largest distribution network, with over 1,600 operating branches and more than 4,600 automated teller machines nationwide.