BDO Unibank, Inc. (BDO) posted P13.3 billion in net income in the first six months of 2017, primarily driven by an expansion in loan portfolio, growth in low-cost deposits and higher recurring fee-based service income. Excluding the extraordinary items from the consolidation of newly acquired subsidiary BDO Life last year, this represents a strong 16% growth in core earnings.
The Bank’s core businesses delivered solid numbers, with customer loans increasing by 17% to P 1.6 trillion while total deposits rose to almost P2.0 trillion, supported by the 17% jump in low-cost CASA deposits, now comprising 73% of total deposits. As a result, net interest income went up by 22% to P38.6 billion.
Meanwhile, non-interest income amounted to P23.2 billion driven by fee-based service income. On a comparable basis, fee-based income rose by 13%. Insurance premiums advanced by 17% to P4.6 billion, while Trading and forex gains declined 21% to P2.6 billion from P3.2 billion a year-ago.
Operating expenses increased by 20% on the Bank’s aggressive drive to grow its core business along with investments in new markets. Excluding extraordinary items and the consolidation effects of ONB and BDO Life, operating expenses would have risen by only 14%.
The Bank prudently set aside provisions of P2.9 billion even as asset quality remained benign with gross non-performing loan (NPL) ratio steady at 1.3%, and NPL cover at 137%.
Following a successful P60 billion (USD1.2 billion) stock rights offer in January 2017 and retained earnings from profitable operations, the Bank’s capital base expanded to P289 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 Ratio at 15.7% and 14.0%, respectively.
Looking ahead, BDO will continue to leverage on its robust business franchise and build on its key initiatives to capture new growth opportunities and solidify its market leadership.