BDO posts record-high net income in 2016

Sy-led Banco de Oro Unibank Inc. (BDO) on Friday said it finished 2016 with consolidated trust assets under management (AUM) of PHP1.03 trillion (Photo: BDO Unibank/Facebook)

MANILA—Sy-led BDO Unibank, Inc. (BDO) on Friday reported its highest net income so far at Php 26.1 billion in 2016, an improvement from the previous year’s Php 25 billion.

In a disclosure with the Philippine Stock Exchange (PSE), the bank said growth was registered in most business segments, with customer loan portfolio rising by 16 percent to Php1.5 trillion and net interest income by 15 percent to Php 65.6 billion “reflecting the quality growth in the loan portfolio.”

Low-cost deposits boosted total deposits by 15 percent to end last year at Php 1.9 trillion

Fee-based income went up 15 percent to Php 22.2 billion and insurance premium amounted to Php 8 billion “as the Bank’s efforts at diversifying its income stream start to bear fruit.”

“These fee income sources compensated for the decline in trading gains to Php 4.8 billion,” the disclosure said.

Last year, the bank’s gross operating income reached Php 107.2 billion while total operating expenses rose 27 percent to Php 70.1 billion “primarily reflecting the consolidation of One Network Bank (ONB) and BDO Life Insurance.”

Sans the expenses from this consolidation, operating expenses would have risen by only 11 percent, it said.

BDO completed the acquisition of the Davao City-based One Network Bank Inc. (ONB) in July 2015 through a share swap deal, with the former issuing 64.5 million common shares to shareholders of one of the country’s largest rural bank.

The acquisition made ONB, which has 105 branches and micro-banking offices in Mindanao and Panay Island, among BDO’s subsidiary and allows the Sy-led Bank to expand its operations in Mindanao and Panay Island.

Some Php 3.8 billion was set aside by the bank for provisioning even as gross non-performing loan (NPL) ratio remains at 1.3 percent and NPL coverage ratio is at 139 percent.

Total capital amounted to Php 217.5 billion while capital adequacy ratio (CAR), a gauge of a bank’s financial health, stood at 12.4 percent and common equity tier 1 (CET1) ratio is at 10.7 percent.