Banco De Oro Unibank Inc. posted an audited net income of P6.1 billion for the full year 2009, driven by robust growth in operating income and a slower increase in operating costs. This was higher than the P5.5 billion target for the year and represents an increase of 173% over the P2.2 billion income registered in 2008.

The Bank’s operating income was generated from core businesses, leading to reduced reliance on volatile trading income. Net interest income increased 33 percent to P30.6 billion in 2009, given a larger level of earning assets and improved margins.

Net interest income was driven by the 20 percent expansion in gross customer loans to P472.7 billion, and growth in low-cost deposits. Loan demand was sustained across all market segments, while low-cost deposit growth was fueled by additional branch redeployments. Total non-interest income grew 13 percent, while fee-based service income, exclusive of trading income and one-time gains, grew 12%.

Non-performing loan (NPL) ratio dipped to 3.2% from 4% as of the 4thquarter of 2008. The Bank took early steps to adjust its risk management processes even before the onset of the financial crisis in late 2008. Nevertheless, the Bank maintained its conservative outlook setting aside provisions of P6.2 billion, thereby improving its NPL coverage ratio to 80%.

For this year, the Bank hopes to do well by leveraging on its operating scale and maintaining good growth in its core businesses amid a more favorable operating environment. In this light, the Bank is considering plans to raise fresh capital to support its medium-term growth objectives and further reinforce its position in the industry. The amount, structure and timing have yet to be finalized at this point.

With a strengthened business franchise across most business lines, BDO maintained its industry leadership in terms of total assets, customer loans, deposits, and trust assets under management.