BDO Unibank Inc., the country’s largest lender controlled by tycoon Henry Sy, said Friday net income dropped 10 percent in the first quarter to P5.5 billion from P6.1 billion a year ago, on lower trading and foreign exchange gains.
The bank said despite the lower profit in the January-March period, it expected full-year income to rise 4 percent to P26 billion in 2016 from P25 billion last year.
BDO president and chief executive Nestor Tan said in a news briefing in Makati City the P26-billion income guidance this year would translate into a 12.5-percent to 13-percent return on equity.
Tan said the bank remained optimistic this year because of the country’s sustained sound economic fundamentals and good demographics.
“We expect the Philippine economy to continue its growth trajectory this year and we see growth in provincial areas,” he said.
Tan said the two major engines of growth—business process outsourcing and remittances from overseas Filipinos—would continue to expand this year. He also said the consumer sector remained resilient.
He said while loan growth would continue to rise, the growth would be tempered this year.
BDO said net profit declined in the first quarter on lower trading and foreign exchange gains.
Trading and FX gains in the first three months fell 58 percent to P1.5 billion from P3.4 billion a year earlier.
Net interest income jumped 17 percent to P15.5 billion from P13.3 billion a year ago. Fee-based income from payments, transaction banking and asset management services increased 11 percent to P4.8 billion.
The bank’s non-performing loan ratio settled at 1.3 percent, while NPL cover stood at 163 percent with the bank setting aside P827 million as provisions for the quarter.
With a capital base of P204 billion, the bank’s capital adequacy ratio, Tier 1 capital ratio and common equity tier 1 were at 13.4 percent, 11.8 percent, and 11.4 percent, respectively, above the current regulatory minimum levels under the Basel 3 framework.
Tan said BDO would put up 50 to 100 branches nationwide this year, depending on growth opportunities.
He said the acquisition of the Mindanao-based rural bank One Network Bank would be a good move to seize the opportunities in the south.
“We will continue to grow our network outside the national capital region,” Tan said.
BDO has one of the largest distribution networks, with more than 1,000 operating branches and over 3,000 automated teller machines nationwide. 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.