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| BDO Posts Php28.2 Billion Net Income in 2020 |
Net interest income (NII) increased by 12 percent to P133.7 billion. Loans managed to rise 3 percent to P2.3 trillion, led by the customer and corporate accounts. The Bank continued to assist its borrowing customers, ensuring their uninterrupted access to credit facilities, in addition to granting loan moratoria under Bayanihan I and II.
CASA deposits continued to rise, rising 17 percent to P2.1 trillion, as clients could access BDO goods and services through its branches, ATMs, and digital platforms even during quarantine restrictions.
Non-interest income declined 8 percent and settled at P55.2 billion, backed by fee-based income, trading profits, and insurance premiums. Business volumes were initially affected by mobility limitations but have since started to recover steadily. Wealth management, on the other hand, remained resilient with trust volumes and fees sustaining growth. Trading profits rose as the Bank capitalized on favorable market conditions while insurance premiums grew modestly amid the lockdowns' initial effect.
Related: BDO Leasing posts P81 million Profit in 1H 2020
Operating expenses decreased 2 percent to P112.6 billion due to a decline in marketing and volume-related expenses.
The Bank’s provisions of P30.2 billion were in line with prudent credit and provisioning policies, intended to further improve its balance sheet. The NPL ratio stood at 2.65 percent, with NPL coverage at 109.5 percent. As of yearend, the Bank’s overall Loan Loss Reserves is equal to 3 percent of Gross Customer Loans and are deemed more than adequate to account for possible losses.
The Bank’s capital base rose to P393 billion with its Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) at 14.4 percent and 13.2 percent, respectively, comfortably above minimum regulatory thresholds. The Bank’s capital rose by 6 percent considering the pre-emptive provisions and the market effect of COVID-19. Book value per share likewise increased 6 percent to P88.11 from P83.03 in 2019.
BDO remains cautiously positive on a gradual upturn in 2021. With its vast business presence and dedicated workforce, the Bank remains committed to providing banking products and services attuned to its customers' needs. These include digital enhancements that enable faster and safer access to services, such as QR code-based ATMs and merchant transactions. These are part of the benefits anticipated from its ongoing Next Generation IT upgrade.