Connect with us

Hi, what are you looking for?

Economy

BDO Q1 net profit rises 19% on non-interest income

BDO Unibank Inc., said it booked a P10.4 billion net profit in the first quarter, up 19% from a year earlier, buoyed by a strong non-interest income performance.

Nestor V. Tan, the bank’s president and CEO, said at the bank’s annual meeting Friday that net interest income fell 3% year-on-year to P32 billion due to weak loan demand and lower net interest margins.

This was offset by the 21% increase in non-interest income to P15.4 billion. The bank also booked a 31% rise in insurance premiums from its life business as well as trading gains posted this period, following a year-earlier trading loss.

Loans fell 1% to P2.218 trillion, with the non-performing loan ratio at 2.81% in the first quarter, rising from the 2020 level of 2.65% but below the industry average of 3.67%, Mr. Tan said.

BDO had a bad loan coverage ratio of 107% at the end of March, against 110% in 2020 but above the industry average of 95%, he added.

Operating expenses rose to P31.1 billion from P30.5 billion a year earlier.

The bank set aside P2.9 billion in loan loss provisions in the first quarter, up 30% from a year earlier.

“Compared to our current NPL level of only 2.3% the bank’s capital base is strong enough to withstand shocks,” Mr. Tan said.

Deposits totaled P2.63 trillion in the first three months, up 2% from a year earlier.

Low-cost CASA deposits rose 11% to P2.179 trillion at the end of March, accounting for 83% of the total.

Overall capital rose 8% to P401 billion.

The capital adequacy ratio was 14.5%, while the common equity tier-one ratio was 13.4% at the end of March, both above the regulatory minimum.

Mr. Tan said the bank is continuing to pursue its goal of serving the unbanked segment of the population over the next five years. BDO will also ramp up its digital transformation by launching new products, processes and platforms.

He said NPLs are expected to peak at 4-5% this year before ending 2021 at around 3%.

“We are below that. So I think we’re trending quite better than what we anticipated. But having said that, the challenge… is not in the NPL ratio,” he said.

“The second thing that we need to do is to protect the balance sheet and in 2020, we did pre-emptive provisioning and our NPL cover is in excess of 100%. Given the loss default that we’ve experienced, which is about 50%, I think the balance sheet is adequately protected, and more for potential increases in delinquencies, if (that) should happen,” he added.

BDO shares rose P2 or 1.94% to P105 on Friday. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

Virgin Orbit’s next satellite launch will take place from the UK, following the success of the “Straight Up” mission, which lifted off from Mojave...

Investing

Post Office collection and cash delivery workers are to stage a one-day strike later this month in a dispute over pay. Members of the...

Investing

UK consumers cut back on credit card borrowing in May amid fears over rising interest rates and a slowing economy driven by a cost...

Investing

London City airport is seeking to overturn its Saturday flight ban and raise by 40% the limit on its passenger numbers. A local residents’...

Investing

The bank said that it was introducing a £1,200-a-year pay increase from August 1, which would start to show in next month’s pay packets....

Investing

Postmasters caught up in the Horizon IT scandal say that they are still being “left in the dark” about a compensation package after the...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.