BDO UNIBANK, Inc. saw its net profit grow by 6.09% year on year in the third quarter on the sustained expansion of its core businesses.
BDO’s attributable net income rose to P22.47 billion in the three months through September, up from P21.18 billion in the same period last year, its financial statement disclosed to the stock exchange on Monday showed.
This brought its nine-month net earnings to P63.09 billion, up by 4.07% from P60.62 billion in the same period last year.
This translated to a return on average common equity and a return on average assets of 14.11% and 1.67%, respectively, down from 15.04% and 1.75% in the same period last year, as net income increased at a slower pace compared with average common equity and average assets.
BDO’s net interest income climbed by 10.81% to P51.88 billion in the third quarter from P46.82 billion in the same period last year.
This came as its interest earnings increased by 9.73% to P75.98 billion from P69.24 billion, mainly driven by higher interest income from loans. Interest expense also jumped by 7.49% to P24.1 billion from P22.42 billion.
Net interest margin went down to 4.29% at end-September from 4.32% a year prior, which it said was due to the Bangko Sentral ng Pilipinas’ (BSP) policy rate cuts and competitive market pricing.
The bank’s other operating income also grew by 12.89% to P19.44 billion in the July-to-September period from P17.22 billion last year amid increases in its earnings from service charges, fees, and commissions, trust fees, and foreign exchange gains.
Meanwhile, its income from insurance operations decreased by 22.71% to P1.77 billion from P2.29 billion.
On the other hand, BDO’s operating expenses increased by 14.09% to P41.22 billion from P36.13 billion due to higher costs related to compensation and benefits, taxes and licenses, and advertising, among others.
The bank’s gross customer loans climbed by 14% to P3.5 trillion as of September amid growth across all market segments.
“Asset quality remained stable, with nonperforming loan (NPL) ratio at 1.77%, and NPL coverage at 134%,” it said.
Deposits with the bank also grew by 10% year on year to P4.11 trillion as of September as its demand deposits increased by 13% and its time deposits rose by 18%. Its current account, savings account or CASA ratio was at 67%.
BDO’s assets expanded by 10% year on year to P5.27 trillion as of September “coming from growth in gross customer loans and investment securities funded by deposits and the sustainability bond issuance.”
Total equity was at P630 billion, also up 10% year on year amid its continued profitable operations.
BDO’s capital adequacy ratio stood at 15.55%, up from 15.22% a year prior as the increase in its capital coming from its profits outpaced the growth in its risk-weighted assets. Its common equity Tier 1 ratio also rose to 14.4% from 14.1%.
Its liquidity ratio was at 31.85%, down from 34.34% last year as its loans grew faster.
“The Philippines is expected to demonstrate continued resilience despite global trade uncertainties from higher US tariffs and local political issues, supported by stable inflation and strong domestic consumption. Meanwhile, the bank’s robust capital foundation and diversified business portfolio position it well to navigate current risks and capitalize on emerging growth prospects,” BDO said in a statement.
Its shares dropped by P4.90 or 3.61% to end at P131 apiece on Monday. — A.M.C. Sy
