BDO Unibank, Inc., a full-service universal bank in the Philippines, has reported a 12% increase in its net profit for the second quarter of this year. This was driven mainly by better net interest earnings, foreign exchange gains, and higher lending activity during the period.

According to its quarterly report disclosure to the Philippine Stock Exchange (PSE), the bank was able to book an attributable net income of P12.205 billion in the second quarter of this year, up 10.64% from the P11.031 billion it reported for the same period in 2021.

This brings its attributable net profit to P23.943 billion for the first half of 2022, which is 12% higher than the P21.421 billion net profit it disclosed last year. Its customer loan portfolio also increased by 9%.

BDO’s current account savings account (CASA) deposits went up 11% and accounted for 85% of total deposits during the period. The ratio of the bank’s nonperforming loans (NPL) to the total went down to 2.39%.

Despite improved asset quality, BDO still set aside P8.2 billion in provisions for impairment losses in the first half, up by 21% year on year. This brings its NPL coverage ratio to 138%.

Capitalizing on the country’s structural opportunities for long-term growth

In a statement, the bank said that its pre-provisional operating profit was P39.2 billion, 18% higher year on year, which showed the strength of its core income sources amidst a tempered increase in the bank’s operating expenses.

“BDO’s established business franchise, healthy capital position, and sustainable earnings performance reinforce the bank’s resilience against prevailing macro headwinds and have put it in a good position to capitalize on the country’s structural opportunities for long-term sustainable growth,” the statement said.

As of June, the bank’s capital adequacy ratio was also reported at 14.48%, inching down from 14.99% a year prior. Still, the figure remains well above the regulatory minimum of 10%. Meanwhile, its net interest income in the second quarter of 2022 stood at P35.537 billion, up 9.6% from the P32.423 billion it posted a year before.

This was driven by the 5.64% growth in its interest earnings from loans and receivables to P32.705 billion, as well as the 31.94% increase in its income from trading and investment securities to P5.883 billion.

These factors helped offset the slight rise in its interest expenses, from P3.47 billion to P3.514 billion.

For the first semester of the year, BDO’s net interest income was at P69.449 billion, 8% higher than the P64.444 billion seen in the same period last year. This was amidst an expansion in earning assets and improved funding costs.

Meanwhile, the bank’s non-interest income was at P17.596 billion in the second quarter, up by 22.95% year on year from P14.311 billion.

By Ralph Fajardo

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