BDO Unibank Inc., the country’s largest lender controlled by the Sy family, said Monday net income in the first half jumped nearly 400 percent to P21.4 billion from P4.3 billion a year ago, on the back of strong earnings stream and normalized provisions.
“BDO’s solid balance sheet, healthy capital position, and sustained earnings performance put the bank in a good position to leverage on the country’s economic recovery,” the bank said in a disclosure to the stock exchange.
Customer loans remained flat at P2.3 trillion compared to the same period last year, but total deposits grew to P2.7 trillion, driven by the 13-percent increase in current account/savings account deposits, resulting in a CASA ratio of 84 percent. Net interest income totaled P64.4 billion, with net interest margin at 4.06 percent for the period.
Non-interest income rose to P29.7 billion, led by fee-based income which increased 20 percent to P16.1 billion and insurance premiums which contributed P9.2 billion, up by 31 percent. Trading and forex gains normalized to P2.0 billion.
Operating expenses rose 4 percent to P60.9 billion, on a 29-percent growth in expenses related to life insurance business. Excluding the impact of the life insurance business, operating expenses would have increased by just 1 percent.
“Total provisions amounted to P6.8 billion as the bank continued to build up its buffer. This was lower than the pre-emptive provisions booked in the first half of 2020 against possible pandemic-induced delinquencies,” it said.
Provisions to gross loans in the second quarter were steady at 3.1 percent. Gross non-performing loan ratio stood at 3.1 percent, well below the bank’s worst-case expectations of 4 to 5 percent, while NPL cover remained more than adequate at 100 percent.
Total capital base strengthened to P412. 7 billion, with capital adequacy ratio and common equity tier 1 ratio increasing to 15.0 percent and 13.9 percent, respectively, well above regulatory minimum.
The bank’s book value per common share rose to P92.57 as of end-June 2021 from P82.28 in the same period last year for a 12-percent year-on-year growth.
The bank’s return on average common equity for the first half 2021 improved to 10.75 percent from 2.27 percent in the same period last year.
BDO’s net income significantly declined by 78.6 percent in the first half of 2020 to P4.3 billion from P20.1 billion a year ago, as it allotted total provisions of P22.4 billion in anticipation of potential delinquencies due to the COVID-19 pandemic.
BOO 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 banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit card services.
BOO has the country’s largest distribution network, with over 1,400 consolidated operating branches and more than 4,400 A TMs nationwide. It also has 16 international offices (including full-service branches in Hong Kong and Singapore) in Asia, Europe, North America and the Middle East.
BDO was ranked as the country’s largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of March 31, 2021.