The banking arm of the Henry Sy-led SM Group, BDO Unibank Inc., is close to reaching its P20.4-billion profit guidance for this year as its nine-month net income hit P18.2 billion.
For the first nine months of the year, BDO’s net income grew by 73 percent to P18.2 billion from P10.5 billion in the same period last year.
“We are on track and very optimistic of hitting our P20.4 billion guidance for 2013,” BDO President Nestor Tan said.
Gross customer loans of BDO increased by 17 percent to P846.4 billion on broad-based expansion across key markets, while its total deposits accelerated by 40 percent to P1.2 trillion, led by the steady growth in low-cost deposits as well as the inflow of maturing special deposit accounts (SDA) funds from the Bangko Sentral ng Pilipinas (BSP).
The BSP is gradually phasing out the SDA facility since July and it will be closed to individual placements by the end of November.
“Our core businesses continued to deliver very good numbers despite pressures from excess system liquidity and capital market volatility,” Tan added.
The growth in both loans and deposits contributed to a 16-percent hike in net interest income to P31 billion, while non-interest income stepped up by 36 percent to P25.8 billion, on the double-digit expansion on both fee-based income and trading and foreign exchange gains.
The growth in operating expense, meanwhile, remained steady at 8 percent.
The bank’s gross non-performing loan ratio fell to 2.4 percent by end-September 2013. Reflective of its conservative provisioning stance, the BDO set aside provisions of P5.1 billion to lift its non-performing loan coverage ratio to 152 percent.
As of end-September 2013, BDO’s Capital Adequacy Ratio (CAR) and Tier 1 Capital ratio of 17:1 percent and 15.3 percent, respectively, remained well above the regulatory minimum, and comfortably exceeding the Basel III requirements set for implementation in January 2014.
During the first half of the year, BDO more than doubled its net income to P14.1 billion from P5.8 billion from the same period last year.
By then, the bank has been reporting that all of its business segments are registering strong performance, which is enough to push the company’s profit to a record high.