BDO sells P40.1b worth of bonds on big demand

BDO Unibank Inc., the country’s biggest lender controlled by the Sy family, successfully raised P40.1 billion of fixed-rate bonds, or eight times the original offer of P5.0 billion, on robust demand from retail and institutional investors.

The one-week offering period ended on Jan. 24, 2020, with the issue date set on Feb. 3, 2020.

The bank said in a statement the bonds would have a tenor of 2.5 years with a yield of 4.408 percent a year. Interest will be paid quarterly, calculated on a 30/360 count basis.

“The bond issuance is part of BDO’s continuing efforts to diversify its funding sources and support its lending activities, and follows the P35-billion of fixed-rate bonds issued in February last year,” it said.

The Hong Kong and Shanghai Banking Corp. Ltd. was the sole lead arranger for the issue, while BDO Unibank, BDO Private Bank Inc. and HSBC were the selling agents.

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

BDO has one of the largest distribution networks, with over 1,400 operating branches and over 4,400 ATMs nationwide. It also has full-service branches in Hong Kong and Singapore as well as 20 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 Sept. 30, 2019.

BDO’s net income in the first nine months of 2019 jumped 49.3 percent to P32.1 billion from P21.5 billion a year ago, largely driven by the expansion in its recurring core revenues.

The three-quarter net profit translated into a return on common equity of 12.5 percent, significantly higher compared to 9.5 percent in the same period last year.

Customer loans increased 6 percent year-on-year to P2.1 trillion, led by the sustained growth in the middle-market and consumer segments. Meanwhile, total deposits rose  3 percent to P2.4 trillion, with low-cost current account/savings account or CASA deposits increasing by 6 percent and accounted for 72 percent of total deposits.

Net interest income increased year on year to P88.5 billion, with net interest margins further improving in the third quarter.

Non-interest income climbed to P44.1 billion, led by fee-based income and insurance premiums which accelerated 14 percent and 23 percent to P25.4 billion and P10.8 billion, respectively.

Trading and foreign exchange gains in the third quarter amounted to P690 million from P1.0 billion year-ago.