BDO Unibank, Inc. (BDO)
posted P12.3 billion in net income in
the 3Q 2020 despite the continuing impact of the pandemic. This brings earnings
for the first nine months of the year to P16.6
billion, a decline of 48% from the same period last year, due to the upfront
provisions booked in 2Q 2020 in anticipation of potential delinquencies due to
the pandemic.
Despite BDO Unibank promising results, the Bank recognizes that the pandemic difficulties still lie ahead. The delinquency problem on loans have not yet peaked, interest rate caps on credit cards will be instituted soon and there are added costs in doing business as a result of necessary precautions inherent in the Bank’s operations. All of these and more are seen to put pressure on the Bank’s earnings.
Loans rose at a more
tempered 6 per cent to P2.2 trillion, driven
by corporate and consumer accounts. The Bank remained supportive of its borrowing
clients, ensuring continued access to their credit facilities to help them
manage their funding requirements during these challenging times, notwithstanding
loan payment deferments under Bayanihan I
and II.
Asset quality remained
stable, with gross non-performing loans (NPL) ratio at 1.97 per cent.
Meanwhile, the NPL cover settled at 138 per cent. Total provisions for 9M 2020
amounted to P23.8 billion, inclusive of
the pre-emptive provisions in 2Q 2020.
Total deposits grew to P2.6 trillion, driven by the faster growth
in Current Account/Savings Account (CASA) deposits, with almost all of the
Bank’s branches operational since 2Q 2020.The Bank’s CASA ratio climbed to a
new high of 79 per cent. Net interest income (NII) went up by 13 per cent year-on-year
to P99.8 billion.
Non-interest income settled
at P36.8 billion, led by fee-based
income and insurance premiums with P20.2
billion and P10.9 billion, respectively.
Wealth management remained resilient with trust volume and fees sustaining
steady growth despite soft market conditions. However, some of the Bank’s businesses,
specifically those that rely on face-to-face interaction, are still gradually
rebuilding their volumes.
BDO Unibank Operating expenses declined by 3 per cent to P83.6 billion on lower volume-related expenses.
The Bank’s balance sheet remains solid with a capital base of P378.6 billion. Capital Adequacy Ratio
(CAR) and Common Equity Tier 1 (CET1) ratio were at 14.3 per cent and 13.2 per
cent, respectively, remaining well above regulatory minimum.
BDO Unibank believes that its strong business franchise and robust balance sheet place the Bank in a good position to leverage on a post-pandemic economic recovery.
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