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Friday, March 29, 2024

BDO’s net income climbs 13% to P13b

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BDO Unibank Inc., the country’s largest lender controlled by tycoon Henry Sy, said net income in the first half jumped 13 percent to P13.2 billion from P11.7 billion a year ago on the strength of core businesses.

The first six months’ performance was also slightly ahead of the bank’s net income target of P26 billion this year. 

BDO said in a statement this was a result of broad-based improvement across the bank’s businesses and a one-time gain from the consolidation of BDO Life.

“The bank’s core lending, deposit-taking and fee-based businesses drove the bank’s performance during the period,” it said.

Customer loans grew to P1.4 trillion, outpacing the industry with a 21-percent increase. Total deposits went up by 17 percent to P1.8 trillion, driven by the 23-percent jump in low-cost deposits. As a result, net interest income advanced 17 percent to P31.7 billion.  

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Fee-based service income rose 18 percent to P10.6 billion, generated from the bank’s investment/wealth management, payments/electronic banking, capital markets and insurance businesses. Trading and foreign exchange income normalized and contributed P2.9 billion in the semester.

Other income inclusive of one-time gain from the consolidation of the bank’s life insurance business settled at P8.6 billion. Without consolidation effects and one-off gains, other income grew 13 percent.  

Operating expenses increased 31 percent following the consolidation of One Network Bank and BDO Life which were absent in the comparable period last year.

It said excluding ONB and BDO Life, operating expense growth would have been 12 percent, driven by higher manpower costs arising from collective bargaining agreement renegotiation last year, one-time expenses and volume-related costs on the bank’s business expansion.

BDO allocated P1.7 billion in provisions even as asset quality remained stable. Gross non-performing loan ratio was steady at 1.3 percent, while NPL cover remained high at 153 percent.

The bank’s capital base stood at P211.1 billion, with common equity tier 1 and capital adequacy ratio all remaining above the current regulatory minimum under the Basel III framework.

BDO president and chief executive Nestor Tan earlier said the bank was aiming for a minimal 4-percent growth in net income to P26 billion from P25 billion in 2015.

BDO is a full-service universal bank which provides a wide range of corporate, commercial and retail banking services.  These services include traditional loan and deposit products, as well as treasury, trust banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit card services. 

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 and 26 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.

BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of March 31, 2016.

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