BDO UNIBANK, Inc. recorded a higher net profit in the third quarter amid growth in its core businesses.
The bank’s attributable net earnings went up by 16.4% to P18.7 billion in the July-to-September period from P16.06 billion a year ago, it said in a disclosure to the local bourse on Wednesday.
This brought its attributable net profit to P53.9 billion in the first nine months of the year, 34.7% higher year on year.
Return on common equity improved to 15.1% as of end-September from 12.4% a year earlier. Return on assets also rose to 1.73% from 1.43%.
“While macroeconomic challenges persist, the bank remains cautiously optimistic and is well-positioned to capitalize on opportunities given its strong balance sheet and diversified business franchise,” the bank said in a statement.
Net interest income increased by 24% to P47.94 billion in the third quarter from P38.64 billion in the same period in 2022.
Interest income on loans and other receivables surged by 40.3% to P50.34 billion in the third quarter from P35.86 billion a year earlier.
Interest earnings from trading and investment securities improved by 53.6% to P10.08 billion from P6.56 billion in the comparable year-ago period.
For the first nine months, net interest income rose by 27% to P137.4 billion amid higher earning assets and interest margins due to the rate hikes of the Bangko Sentral ng Pilipinas.
Net interest margin stood at 4.65% as of end-September from 4.11% a year earlier.
Meanwhile, BDO’s non-interest income in the July-to-September period went up by 3.91% to P19.69 billion from P18.92 billion amid higher commission fees and a lower net loss from trading.
On the other hand, operating expenses rose by 17.6% year on year to P39.51 billion in the third quarter from P33.57 billion, driven by higher compensation and occupancy expenses, as well as the increase in costs related to its insurance business.
Loans stood at P2.7 trillion as of end-September, BDO said. Its gross nonperforming loan (NPL) ratio was at 1.99% and its NPL coverage ratio was at 176% for the period.
On the funding side, total deposits expanded by 12% to P3.4 trillion as of September, the Sy-led bank said.
The bank’s common equity Tier 1 ratio was well above the regulatory requirement at 14.5%. Its capital adequacy ratio was also higher than the regulatory requirement at 15.6%.
Liquidity ratio rose to 35.22% in the first nine months of the year from 32.99% a year ago, as liquid assets grew at a faster pace than total assets.
BDO has over 1,700 branches and 4,700 automated teller machines nationwide. It also has 16 international offices in Asia, Europe, North America and the Middle East.
The Sy-led lender’s shares went up by P1.6 or 1.26% to close at P129 apiece on Wednesday. — Keisha B. Ta-asan