BDO H1 net income drops 78%


    BDO Unibank Inc. (BDO) yesterday said its profits in the first six months of the year declined by 78.6 percent as it beefed up its total provisions in “anticipation of potential delinquencies due to the COVID-19 pandemic.”

    In a statement, BDO said it recorded P4.3 billion in profits in the first half of this year compared to P20.1 billion in the same period last year.

    The bank booked total provisions of P22.4 billion.

    “The provisions are anticipatory in nature, and meant to safeguard the balance sheet. By recognizing the provisions upfront, the bank can now focus on growing its business as restrictions under ECQ/GCQ (enhanced community quarantine/general community quarantine) are gradually relaxed,” BDO said.

    The bank’s gross non-performing loan (NPL) ration increased to 1.95 percent while NPL cover settled at 139.4 percent for the first six months this year compared to the same period last year.

    BDO, however, stressed its core businesses “held up well amid the COVID-19 pandemic, with Pre-Provision Operating Income (PPOP) up 17 percent.”

    Net interest income for the first half of this year went up by 17 percent.

    Customer loans rose by 11 percent to P23 trillion, while total deposits went up by 9 percent to 2.6 trillion.

    BDO said this was driven by the “19 percent expansion in Current Account/Savings Account (CASA) deposits which now account for 77 percent of total deposits.”

    As of end-June 2020, BDO said branch operations have been fully restored from only 45 percent at the start of the ECQ in mid-March 2020.

    Non-interest income settled at P24.8 billion, led by fee-based income with P13.4 billion and insurance premiums with P7 billion.

    Operating expenses dipped 1 percent to P56 billion on lower volume-related expenses, and despite the additional costs and operational adjustments to adapt to the “new normal” to ensure the security, health and safety of BDO employees and clients.

    Total capital settled at P367.5 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier (CET1) ratio at 13.8 percent and 12.7 percent, respectively, despite the upfront provisions.

    “These rations are well above regulatory minimum and deemed sufficient to support the bank’s anticipated asset growth as well as regular quarterly dividends,” BDO said.