In spite of the ongoing effects of the pandemic, BDO Unibank, Inc. (BDO) reported a net income of ₱12.3 billion in the 3rd quarter of 2020. This brings earnings to ₱16.6 billion for the first nine months of the year, a 48 percent fall from the same period last year due to the early provisions of 2Q in anticipation of potential pandemic delinquencies.
BDO publishes income for the first 9 months, regains momentum amid the pandemic
Despite the promising results, BDO acknowledges that the pandemic problems still lie ahead. Delinquency issues on loans have not yet peaked, interest rate limits on credit cards will soon be imposed and additional costs will be generated in doing business as a result of the required precautions inherent in the bank’s operations. All of these, and more, are seen to exert sanctions on the bank’s profits.
Loans grew by 6 percent to ₱2.2 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 handle their financing needs during these difficult times, notwithstanding the deferral of loans under Bayanihan I and II.
Asset quality remained stable, with a gross non-performing loan (NPL) ratio of 1.97 percent. In the meantime, the NPL cover was set at 138 percent. Total provisions for 9 months in 2020 amounted to ₱23.8 billion, including the pre-emptive provisions for 2Q 2020.
Total deposits grew to ₱2.6 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 percent. Net interest income (NII) went up by 13 percent year-on-year to ₱99.8 billion.
Non-interest income settled at P36.8 billion, driven by a fee-based income and insurance premium with ₱20.2 billion and ₱10.9 billion respectively. Wealth management remained resilient with trust volume and fees, supporting steady growth considering the soft market conditions. However, some of the Bank’s companies, especially those who rely on face-to-face contact, are still gradually rebuilding their volumes.
Operating expenses declined by 3 percent to ₱83.6 billion on lower volume-related expenses.
The balance sheet of the bank remains solid with a capital base of ₱378.6 billion. Capital Adequacy Ratio ( CAR) and Common Equity Tier 1 (CET1) ratio stood well above the regulatory minimum at 14.3 percent and 13.2 percent respectively.
BDO 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.
For more information about BDO Unibank, visit their official website.