BDO net income down 2.6% in Q2, up 0.3% in H1

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SY-LED BDO Unibank’s net income in the second quarter of 2017 eased 2.6 percent to P7.5 billion from P7.7 billion a year earlier.

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For the first six months of the year, BDO’s net income rose 0.3 percent from a year earlier.

Based on the bank’s financial statement on the Philippine Stock Exchange on Monday, the bank said its net income for the first half of the year increased to P13.3 billion from P13.2 billion a year earlier.

BDO Unibank did not elaborate on its second-quarter performance. It focused only on its core earnings for the first half.

The lender said its core businesses delivered solid numbers, with customer loans increasing by 17 percent to P 1.6 trillion while total deposits rose to almost P2 trillion.

As a result, BDO’s net interest income went up by 22 percent to P38.6 billion. Non-interest income amounted to P23.2 billion, driven by fee-based service income.

Operating expenses increased by 20 percent due to the bank’s aggressive drive to grow its core business along with investments in new markets.

It said it set aside provisions of P2.9 billion even as asset quality remained benign with gross non-performing loan (NPL) ratio steady at 1.3 percent, and NPL cover at 137 percent.

Its capital base expanded to P289 billion, with capital adequacy ratio (CAR) and common equity tier 1 ratio at 15.7 percent and 14 percent, 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,” it said.

To issue P5B LTNCDs
BDO also announced that it is set to issue P5 billion of long-term negotiable certificates of time deposit (LTNCDs) as part of its efforts to diversify the maturity of its funding sources and support business expansion plans

The bank has an option to upsize the offer depending on market feedback.

The LTNCDs will have a term of five-and-a-half years with indicative pricing at 3.50 percent to 3.75 percent. The final coupon rate will be set prior to or at the end of the offer period.

Interest rate will be paid quarterly in arrears. The minimum investment is P100,000 with increments of P50,000.

“The offer period will start on July 31 up to August 11, with the issue date set for August 18, 2017. However, the Bank reserves the right to adjust the timing of the offer as needed,” it said.

BDO last issued P7.5 billion worth of LTNCDs in April 2015.

As an investment, LTNCDs are tax-exempt for qualified individuals or institutions if held for at least five years, and are insured by the Philippine Deposit Insurance Corp. for up to P500,000.

Deutsche Bank AG, Manila Branch (DB) and ING Bank N. V., Manila Branch (ING) are the joint lead arrangers and selling agents for the issue, while BDO and BDO Private Bank are the other selling agents.

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