Tuesday, October 27, 2020

BDO Regains Momentum in 3Q 2020

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’s 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.

Operating expenses declined by 3 per cent to P83.6 billion on lower volume-related

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 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.

About BDO
BDO is a full-service universal bank which provides a wide range of corporate and retail
banking services. These services include traditional loan and deposit products, as well as
treasury, trust banking, investment banking, private banking, rural banking, cash
management, leasing and finance, remittance, insurance, retail cash cards and credit card
BDO has the country’s largest distribution network, with over 1,400 consolidated operating
branches and more than 4,400 ATMs nationwide. It also has 16 international offices
(including full-service branches in Hong Kong and Singapore) in Asia, Europe, North
America and the Middle East.
BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds
under management based on published statements of condition as of June 30, 2020. For
more information, please visit www.bdo.com.ph.

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