BDO Leasing swings to net profit of P81M

BDO Leasing and Finance Inc., the leasing and financing unit of BDO Unibank Inc., the largest lender in the country, registered P81 million in net earnings in the first half of 2020, a turnaround from a P29-million loss year-on-year.

BDO said in a statement Tuesday the first-half performance “was due to successful measures implemented to address margin compression.”

Gross revenues totaled P1.3 billion, after lease and loan receivables declined 23 percent, partly due to the sale of a portion of the company’s lower yielding portfolio to mitigate the impact of margin compression, and to the implementation of IFRS 16 which required leases to be booked on-balance sheet, thus diminishing their attractiveness to corporate borrowers.

Meanwhile, total expenses fell 25 percent to P1.2 billion on year on reduced borrowings and lower interest and financing charges, which were down 53 percent, given the decline in interest rates.

Earlier this year, BDO Leasing’s parent company, BDO signed an agreement to sell a controlling stake in BDO Leasing to a third party.