BDO Unibank Inc., the country’s largest lender in terms of assets controlled by retail tycoon Henry Sy, said Monday net income in 2017 rose 7 percent to a record P28.1 billion from 2016 on strong lending and deposit growth.
BDO said in a statement Monday the 2017 performance matched the bank’s earnings guidance of P28 billion for the year. It said excluding the consolidation effects of life insurance business, this represented a 15-percent increase in core earnings on solid growth in loans, low-cost deposits and fee income.
“The sustained expansion in lending, deposit taking and fee-based businesses drove the bank’s solid performance last year,” BDO said.
Customer loans increased 18 percent to P1.8 trillion, on broad-based growth across all loan segments while total deposits went up by 11 percent to P2.1 trillion, led by the 12-percent growth in low-cost current-account, savings-account deposits, which comprised 73 percent of total deposits.
Net interest income rose 25 percent to P81.8 billion.
Non-interest income contributed P47.2 billion, up by 13 percent from 2016, with fee-based income accounting for P28.9 billion for a 30-percent expansion. Insurance premiums went up by 23 percent to P9.9 billion.
“These compensated for the expected 20-percent decline in trading and forex gains to P3.9 billion given the challenging market conditions,” BDO said. Gross operating income increased 20 percent to P129 billion.
Operating expenses rose 21 percent to P84.9 billion. Excluding extraordinary items, operating expenses would have increased by 15 percent, reflecting BDO’s continuing investments in branch network and strategic initiatives.
BDO added 76 branches, bringing total consolidated branches to 1,180 in 2017, including an outlet in Hong Kong.
The bank allocated higher provisions amounting to P6.5 billion to cover required provisioning associated withe the change in loan loss methodology to expected credit losses related to Bangko Sentral circular 855.
The bank’s capital base as of 2017 stood at P298.3 billion, with capital adequacy ratio and common equity Tier 1 ratio at 14.5 percent and 12.9 percent, respectively, both above the limits set by Bangko Sentral ng Pilipinas.
“For 2018, BDO believes that its focused growth strategy, robust business franchise, solid balance sheet and capital base place the bank well positioned to tap opportunities in growth sectors benefitting from the country’s favorable demographics and the government’s infra buildup,” the bank said.
The bank also said it would declare regular cash dividends within the first quarter this year after posting remarkable numbers last year.