Metro Manila (CNN Philippines, July 31) – The country’s largest bank BDO Unibank, Inc. (BDO) on Monday said it posted P13.3 billion in net income in the first six months of 2017.
However, this year’s P13.3 billion in the first half of 2017 is a slight increase of one percent from the P13.2 billion reported in the same period a year ago. Last year’s increase in net income was due to a one-off gain from the consolidation of subsidiary BDO Life, which it acquired in 2016.
In a statement, BDO attributed “an expansion in loan portfolio, growth in low-cost deposits, and higher recurring fee-based service income” as reasons for net income of P13.3 billion in 2017.
“The Bank’s core businesses delivered solid numbers,” BDO said. Customer loans rose by 17 percent to P 1.6 trillion in the period, it said. Total deposits rose to almost P2.0 trillion on the back of low-cost current and savings accounts (CASA) deposits which rose by 17 percent. These low-cost CASAs account for 73 percent of BDO’s total deposits, the bank said.
The push to grow its core businesses and invest in new markets increased BDO’s operating expenses by 20 percent, the bank said. Without one-off items brought about by the consolidation of BDO Life Insurance and its rural bank subsidiary One Network Bank, the increase in operating expenses would have been smaller at 14 percent, it added.
The bank also announced the issue of P5-billion in long-term negotiable certificates of deposit (LTNCD). The LTNCDs being issued are “part of the Bank’s efforts to diversify the maturity of its funding sources and support business expansion plans.” The certificates of deposit will have a term of 5.5 years with indicative pricing at 3.5 percent to 3.75 percent. The offer period will start on July 31 up to August 11, with the issue date set for August 18, 2017, BDO said.
The bank declared that its capital base has expanded to P289-billion. It attributes this to a successful P60-billion stock rights offer in January 2017 and retained earnings from what it termed “profitable operations”.
BDO is the top universal and commercial bank in the Philippines with assets of P2.26 trillion as of March 31, 2017, according to the Bangko Sentral ng Pilipinas (BSP).
Household loans up 22 percent – BSP
Even as BDO cited growth in customer loans, the BSP on Monday noted that loans for household consumption rose 22.5 percent from a year ago to P519 billion in June 2017.
The BSP said this was due to an expansion in credit card loans and other types of household loans, and “sustained growth” in auto loans and salary loans.
“Going forward, the BSP will ensure that the expansion in domestic credit and liquidity conditions proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” the BSP said.
