Banco De Oro Unibank, Inc. (BDO) reported a net income of P7.6 billion for the first nine months of 2011, up 19 percent compared to the P6.4 billion it earned in the same period last year.

The Bank managed to post a record performance despite the difficult operating environment here and overseas. BDO will continue to maintain cautious stance due to the current economic developments in Europe and in the U.S.

BDO’s lending operations posted above-industry growth rates, with gross customer loans growing 24 percent to P620.8 billion compared to a 19% growth rate for the industry. All market segments registered good growth compared to last year. Total deposits increased 15 percent to P820.6 billion, buoyed by low-cost deposits generated from an expanded branch network. System liquidity however, continued to compress asset yields, and net interest income improved slightly to P25.7 billion.

Recurring fee-based income from service businesses however rose 17 percent to P8.8 billion, driven by strong growth from asset and wealth management, payments and electronic banking, insurance and capital markets. The Bank also managed to post a 16 percent increase in trading and foreign exchange gains to P5.1 billion despite the volatile external market conditions. Overall, non-interest income including other miscellaneous income went up by 16 percent to P15.3 billion.

Operating expenses grew moderately at 5 percent to P 27.0 billion as the Bank contained expense growth at manageable levels. As such, pre-provision operating profit rose 10% from last year.

Despite the growth in the Bank’s balance sheet, asset quality improved with the gross non-performing loan (NPL) ratio dipping to 3.9 percent from 4.7 percent as of year-end. BDO also maintained its provisioning by setting aside P5.1 billion year-to-date, bringing its NPL coverage ratio now to 108 percent.

BDO’s capital position was stronger with Capital Adequacy Ratio (CAR) rising to 15 percent following a P8.5 billion Tier 2 issue in June. BDO issued an additional P6.5 billion worth of Tier 2 Notes in October 2011 to further supplement the Bank’s capital position and complete its P15 billion capital program.

The interim results led to enhanced shareholder returns, with an annualized Return on Common Equity of 11.8 percent.