BDO Unibank, Inc. (BDO) delivered P21.4 billion in profits in the first six months of 2021 on the back of a strong sustainable earnings stream and normalized provisions.
Customer loans remained flat at P2.3 trillion compared to the same period last year. Total deposits grew to P2.7 trillion led by the 13 per cent rise in Current
Account/Savings Account (CASA) deposits, resulting in a CASA ratio of 84 per cent. Net Interest Income (Nil) totaled P64.4 billion, with Net Interest Margin (NIM) at 4.06 per cent for the period.
Non-interest income went up to P29.7 billion, led by fee-based income which grew by 20 per cent to ~16.1 billion, and insurance premiums contributing P9.2 billion, up by 31 per cent. Trading and forex gains normalized to P2.0 billion.
Operating expenses grew by four (4) per cent at P60.9 billion driven by the 29 per cent growth in expenses related to life insurance business. Excluding the impact of the life insurance business, operating expenses would have increased by only one (1) per cent.
Total provisions amounted to P6.8 billion as the Bank continued to build up its buffer. This was lower than the pre-emptive provisions booked in the 1 H 2020 against possible pandemic-induced delinquencies. Provisions to Gross Loans in the 2Q 2021 was steady at 3.1 per cent. Gross non-performing loan (NPL) ratio is at 3.1 %, still well below the Bank’s worst-case expectations of four (4) to five (5) per cent, while NPL cover remained more than adequate at 100 percent.
Total capital base strengthened to P412. 7 billion, with Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) ratio both increasing to 15.0 per cent and 13.9 per cent, respectively, well above regulatory minimum. The Bank’s Book Value per common share rose toP92.57 as of end-June 2021 compared to P82.28 for the same period last year for a 12 per cent year-an-year growth.
The Bank’s Return on Average Common Equity (ROE) for the 1 H 2021 improved to 10.75 per cent from 2.27 per cent in the same period last year. BOO’s solid balance sheet, healthy capital position, and sustained earnings performance put the Bank in a good position to leverage on the country’s economic recovery.