BDO Unibank Inc. said Monday net income climbed 18 percent in the third quarter to P8.4 billion from a year ago, on solid expansion of core lending and deposit-taking, life insurance and fee-based businesses.
The third-quarter net results also represented a 15-percent rise from P7.3 billion in the second quarter.
Total profit in the first nine months hit P21.5 billion, up 6 percent from the same period last year.
BDO said excluding the results of BDO Life, which was impacted by PFRS9’s mark to market on its investment portfolio and One Network Bank’s ongoing investment in the micro-SME lending business, net income would have registered a 13-percent growth in January to September.
The bank said lending operations posted a 17-percent increase in gross customer loans to almost P2 trillion, led by the middle-market and consumer segments.
Asset growth was funded by the 12 percent increase in total deposits to P2.3 trillion, with low-cost Casa ratio steady at 70 percent.
Net interest income expanded 20 per cent to P71.5 billion, with net interest margin improving year-on-year and quarter-on-quarter on upward loan re-pricing and managed funding costs given a large low-cost Casa base.
Non-interest income rose to P35.8 billion on the back of insurance premiums and fee-based
income which grew 21 percent and seven percent, respectively.
These growth numbers were offset by the 71-percent decline in trading and forex gains amid the volatility in the capital markets.
Gross operating income went up by 13 percent to P107.3 billion. Operating expenses advanced 13 percent to P71.7 billion, on sustained business and branch expansion as well as higher documentary stamp tax on time deposits owing to the implementation of the government’s tax reform program.
Volume-related operating expenses, comprising 41 percent of total operating expenses, were up 14 per cent.
BDO said it remained prudent as it set aside provisions amounting to P5.5 billion even as gross non-performing loan ratio trended lower to 1.1 percent in the third quarter from 1.2 percent in the second quarter and 1.3 percent a year ago, despite a higher interest rate environment.
NPL cover also increased to 175 percent from 158 per cent in the second quarter and 136 percent a year earlier.
The bank’s capital reached P311.8 billion, with both common equity tier 1 ratio and
capital adequacy ratio remaining above regulatory minimum at 12.3 percent and 13.9 percent, respectively.
BDO said with the positive performance in the first nine months, the 2018 full-year earnings guidance of P31 billion remained within reach given the seasonally stronger fourth quarter, combined with encouraging results from the bank’s strategic initiatives expanding across underserved segments and growth areas.”‹