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By Maricel E. Burgonio, Reporter
THE Philippines’ second-largest bank said its
first-quarter profit declined as it suffered reductions in trading
and foreign-exchange gains.
In a statement, Banco De Oro Unibank Inc (BDO)
said its net income fell by 24 percent to P1.34 billion in the first
three months this year compared with P1.77 billion in the same
period last year.
The bank said the double-digit drop in its
non-interest income overshadowed the modest increase in its net
interest income, citing “a difficult operating environment.”
BDO said its net interest income increased by 6
percent to P5.4 billion due to a better loan and deposit mix. Growth
in low-cost deposits drove the bank’s total deposits to expand by
4 percent to P463.8 billion since the start of the year.
In terms of lending, gross customer loans grew
18 percent from a year ago, and 7 percent compared with last
December. The bank ascribed this to a broad-based increase in all
lending segments.
Since its acquisition of Equitable-PCI Bank (EPCIB)
last year, BDO has been expanding its consumer lending and
remittance business.
BDO’s non-interest income fell 15 percent to
P3.7 billion due to a 53 percent drop in trading and forex gains.
During the period, the peso appreciated against the dollar, while
market fears intensified on higher inflation and widening risk
aversion.
Fee-based and miscellaneous income combined grew
7 percent to P3 billion aided by strong growth in volume and a
one-time gain on Visa shares from its initial public offering (IPO).
Operating costs declined by 3 percent to P6.3
billion despite expenses related to the ongoing integration with
EPCIB as the previous year’s level included the settlement of
prior year’s tax assessments.
Net interest margin improved slightly this year
to 4.02 percent from 3.80 percent in the same three-month period
last year due to higher asset yields and improved funding mix.
Impairment provisions rose 39 percent to P870
million due to more conservative provisioning policies.
BDO missed its profit growth target of 7 percent
last year due to higher expenses related to the consolidation with
EPCIB.
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