BDO Unibank Inc., the banking arm of the SM Group, has set a target of P25.1 billion in net income for 2015 after its first-quarter performance turned in a profit of more than P6 billion.
The bank posted a 12 percent increase in net income for the first three months of the year to P6.1 billion, driven by a 15 percent increase in loans to P1.1 trillion and a 12 percent rise in total deposits to P1.5 trillion. Fee-based income reached P4.3 billion in the January to March period.
“The target is P25.1 billion [which will be driven by]loans and deposits as a result of branch expansion, and the natural fee income that comes with having more clients,” BDO President Nestor V. Tan said after the bank’s annual stockholders meeting on Friday.
Tan said the bank will expand this year through “a combination of organic growth and acquisitions,” compared with acquisition-concentrated growth in the past few years.
The BDO president said the bank is looking at opening at least 50 more branches this year, adding to the six branches completed in the first four months.
To date, BDO has more than 800 branch networks and 2,600 automated teller machines nationwide. It has a branch in Hong Kong and 29 others of remittance and representative offices across Asia, Europe, North America, and the Middle East.
No new acquisitions
Tan said the bank is not yet in discussions over any new acquisition for the year, adding it is “not aggressive in looking” for deals at the moment.
Last year, BDO’s net income met its earnings target — growing 18 percent to P22.8 billion, excluding one-time gains, which boosted its 2013 profit.
BDO has set aside provisions of P1.2 billion within the quarter even as asset quality stood healthy, with its NPL ratio at 1.3 percent and NPL coverage at 192 percent.
Also in the first quarter, the bank had a capital base of P181 billion, and its common equity tier 1 (CET 1) ratio and capital adequacy ratio (CAR) stayed well within the required levels of the Basel 3 framework at a minimum of 11.9 percent and 14 percent, respectively.
BDO also announced in the same meeting that it would issue a special cash dividend of P0.90 per share, with the record and payment dates subject to approval by the Bangko Sentral ng Pilipinas.
Earlier, BDO Senior Vice President and Head of Investor Relations and Corporate Planning Luis S. Reyes Jr. said that the bank was likely to raise another P5 billion tranche of long-term negotiable certificates of deposits (LTNCD) within the year, following the issue of P5 billion LTNCDs in early April.
Tan said the additional P5 billion LTNCD tranche will be issued sometime this year “when the need arises” for bank funding.
The SM Group is one of the Philippines’ largest conglomerates, owned and founded by the country’s richest man, Henry Sy. His holding firm, SM Investments Corp, has interests in shopping mall development and management, retail, real estate development, banking, and tourism.