BDO Unibank Inc. (PSE: BDO) posted a net income of PhP32.7 billion in 2018, up by 17% from the previous year’s PhP28.1 billion and beating the bank’s PhP31 billion full-year guidance on strong recurring earnings from its core businesses. The bank likewise capped another milestone as the first Philippine bank to breach the PhP3 trillion mark in total assets.
Leading the bank’s performance was the solid growth in its core lending and deposit-taking businesses. Gross customer loans rose by 15% to PhP2 trillion on healthy increases across all market segments, while total deposits went up by 14% to PhP2.4 trillion, with low-cost CASA ration at 70%. This resulted in the 20% expansion in net interest income to PhP98.3 billion on better net interest margins (NIM). BDO’s NIM improved to 3.64% from 3.48% in 2017.
Operating expenses amounted to PhP98 billion, up by 16%, in line with the bank’s sustained investments in branch network and strategic initiatives. Excluding taxes and licenses, which grew by 41% as a result of higher business volumes and increased documentary stamp taxes (DST) under TRAIN, operating expenses would have grown by 13%.
BDO remained prudent and set aside PhP6.3 billion in provisions even as NPL ratio further improved to 1% from 1.2% in 4Q 2017. NPL cover was higher at 183% compared to 146% in 2017.
The bank’s capital stood at PhP328.1 billion, with capital adequacy ratio (CAR) and Common Equity Tier 1 (CET1) ratio at 13.7% and 12.1% respectively, both above regulatory levels.