BDO books P42.8-b profit; ChinaBank’s earnings climb by 25%

BDO Unibank Inc., the country’s largest lender led by the Sy Group, said Thursday net income rose 51-percent in 2021 to P42.8 billion from P28.2 billion in 2020, driven by the double-digit expansion in non-interest income and normalized provisions.

The bank said in a statement the remarkable performance last year signaled “normalization to pre-pandemic levels.” The 2021 net profit was P1.4 billion short of the record net profit of P44.2 billion in 2019.

“BDO’s full-year profits were buoyed by an 11-percent increase in non-interest income and normalized provisions. This reflects the bank’s operational resiliency notwithstanding COVID-19-related headwinds depressing loan activity for much of 2021,” it said.

“Overall business conditions appeared to be improving late 2021 however, with loan growth accelerating to 6 percent, ahead of the industry’s 5 percent, as the government began to ease quarantine protocols and mobility restrictions,” it said.

Total deposits rose 8 percent year on year, driven by the 13-percent expansion in current account/savings account deposits—a testament to the strength of the overall franchise. Total capital base stood at P424.5 billion while the capital adequacy ratio—a measure of financial strength—was at 14.6 percent, comfortably above the regulatory minimum.

Meanwhile, China Banking Corp. said net income rose 25 percent in 2021 to P15.1 billion from P12.1 billion in 2020, on the back of sustained core business growth and effective cost management.

The bank said the 2021 performance translated into an improved return on equity and return on assets of 13.6 percent and 1.5 percent, respectively.

ChinaBank president William Whang said the 2021 results reflected their disciplined execution of strategies and commitment to supporting their customers and employees.

“As we increasingly automate and digitize to navigate the continuing challenges of this pandemic, we are focusing on actions and investments that will redound to superior banking experiences and improved financial outcomes,” he said.

China Bank continued to prudently manage interest expense, which dropped 44 percent, resulting in a net interest income of P38.3 billion, up 13 percent, and better net interest margin of 4.2 percent. Meanwhile, credit provisioning was steady at P8.9 billion.

Fee-based income grew 3 percent to P10.4 billion, underpinned by a 39-percent increase in core fee-based income such as foreign exchange gain, trust revenues, investment banking commissions, sale of acquired assets, bancassurance fees, and other transaction-based service charges.

The growth in operating expenses was controlled at 4 percent to P22.3 billion. The sustained efforts to manage expenses while investing in growth strategies resulted in a better cost-to-income ratio of 46 percent from 49 percent.

China Bank ended 2021 with P1.1 trillion in assets, up 7 percent on year, supported by a 9-percent expansion in loans. Meanwhile, deposits increased 3 percent to P863 billion which was driven by an 18-percent buildup in checking and savings accounts deposits.

Total equity increased 13 percent to P119 billion, with a common equity tier 1 ratio of 14.9 percent and total capital adequacy ratio of 15.7 percent, above the regulatory minimum requirement.