• BDO one-time gain, broad-based growth drive H1 net up 13%

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    BDO Unibank Inc. reported a 13 percent year-on-year increase in net income in the first half of 2016 on the back of broad-based improvement across its businesses, along with a one-time gain.

    In a statement on Monday, BDO said it sustained its solid pace in the first six months of the year to post a 13 percent increase in net income to P13.2 billion from P11.68 billion during the same period a year ago.

    For the second quarter alone, the bank’s net profit grew 40.8 percent to P7.72 billion from P5.48 billion in the first quarter.

    BDO said this was a result of broad-based improvement across the bank’s businesses and a one-time gain from the consolidation of BDO Life.

    Core lending, deposit-taking and fee-based businesses drove its performance during the period, the lender said.

    Its customer loan portfolio grew to P1.4 trillion, outpacing the industry with a 21 percent rise.

    Total deposits went up by 17 percent to P1.8 trillion, driven by a 23 percent jump in low-cost CASA (customer account, savings account), comprising 69 percent of total deposits.

    It said net interest income advanced by 17 percent to P31.7 billion.

    BDO’s fee-based service income rose by 18 percent to P10.6 billion, generated from investment/wealth management, payments/electronic banking, capital markets and insurance businesses.

    Trading and foreign exchange income normalized and contributed P2.9 billion to the first half.

    Other income, inclusive of the one-time gain from the consolidation of the bank’s life insurance business, stood at P8.6 billion. Without consolidation effects and one-off gains, other income grew by 13 percent.

    The bank’s operating expenses expanded by 31 percent because of the consolidation of ONB and BDO Life which were absent in the comparable period last year.

    “Excluding ONB and BDO Life, operating expense growth would have been 12 percent, driven by higher manpower costs arising from CBA renegotiation last year, one-time expenses, as well as volume-related costs on the bank’s business expansion,” it stated.

    The bank said it continued to be conservative and set aside P1.7 billion in provisions even as asset quality remained stable.

    Its gross non-performing loan (NPL) ratio was steady at 1.3 percent, while NPL cover remained high at 153 percent.

    The bank’s capital base stood at P211.1 billion, with Common Equity Tier 1 (CET1) and Capital Adequacy Ratio (CAR) all remaining above the current regulatory minimum under the Basel 3 framework.

    “Looking ahead, BDO hopes to continue its strong performance as it leverages on its solid business franchise, strong balance sheet and strategic initiatives to tap its target markets and take advantage of the country’s growth opportunities,” it said.

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