2019 October – BDO Unibank, Inc. delivered P32.1 billion in net income for the first nine months (9M19) of the year compared to P21.5 billion a year-ago, largely driven by the expansion in the Bank’s recurring core revenues. The 9M19 net income translates to a Return on Common Equity (ROCE) of 12.5%, compared to 9.5% in 9M18.

Customer loans increased by 6% year-on-year (yoy) to P2.1 trillion, led by the sustained growth in the middle-market and consumer segments. Meanwhile, total deposits went up by 3% yoy to P2.4 trillion, with low-cost Current Account/Savings Account (CASA) deposits increasing by 6% and accounting for 72% of total deposits.

Net Interest Income (NII) increased yoy to P88.5 billion, with net interest margins (NIMs) further improving in 3Q19.

Non-interest Income went up yoy to P44.1 billion, led by fee-based income and insurance premiums which accelerated by 14% and 23% to P25.4 billion and P10.8 billion, respectively. Trading and foreign exchange gains in 3Q19 amounted to P690 million from P1.0 billion year-ago. However, the trading and forex gains of P4.3 billion for the nine-month period reflects a normalized level compared to 2018, where a more volatile environment prevailed. As such, gross operating income rose to P132.6 billion.

Operating expenses rose by 20% to P85.8 billion given the Bank’s continuing expansion as well as increased volume-related expenses (e.g., taxes and licenses and policy reserves at BDO Life were up by an aggregate 42% yoy). Excluding volume-related expenses, operating expenses would have risen by 14%.

Provisions amounted to P4.2 billion as the Bank maintained its conservative credit and provisioning policies. Gross non-performing loan (NPL) ratio was steady at 1.2%, while NPL cover remained high at 168.2%.

The Bank’s capital base increased to P364.0 billion, with Common Equity Tier 1 (CET1) and Capital Adequacy Ratio (CAR) improving to 13.1% and 14.6%, and remaining comfortably above the current regulatory minimum under the Basel III framework.

With its focused growth strategy, strong business franchise, solid balance sheet and extensive geographic reach, the Bank remains solidly positioned to capitalize on the country’s solid economic pace and growth opportunities in underserved and emerging markets.

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