BDO on track to post another banner year this 2025
Sy family-led BDO Unibank Inc. delivered record-high net income in the first nine months on the back of a double-digit growth in its lending operations, which reached a P3.5-trillion milestone.
The local banking giant said on Monday its profit had hit P63.1 billion, its highest nine-month figure. The amount was 4-percent higher than the P60.6 billion booked a year earlier.
For the third quarter alone, net income increased by 5.9 percent to P22.4 billion, likewise the highest earnings delivered by the bank for the same quarter.
The nine-month earnings were in line with consensus estimates, said online stock brokerage COL in a research note. However, it was slightly below COL’s estimate, accounting for just 71.4 percent of its full-year forecast.
“We continue to favor the bank as we believe that BDO, as the largest bank in the Philippines, is well-positioned to capture growth opportunity as the local economy expands,” COL said in a research note.
“Its extensive and still growing branch network, as well as its strong ties to the SM Group, should provide a significant advantage.”
COL described BDO’s balance sheet as robust and liquid, and its capital ratios healthy. These are seen to give the bank leeway to pursue new avenues of growth.
While margins may narrow due to the interest rate-cutting cycle of the Bangko Sentral ng Pilipinas, COL said the compression would be mitigated by the bank’s asset mix and the reduction of the reserve requirement.
“Additionally, we see potential earnings upside from easing credit costs and the booking of trading gains,” it noted.
Loan book up 14 percent
This was as BDO’s nine-month net interest income rose by 8 percent. Gross customer loans posted a 14-percent growth, hitting P3.5 trillion.
Deposits also improved by 10 percent, 67 percent of which consisted of low-cost deposits.
In terms of asset quality, bad loans accounted for 1.77 percent of total loans. For every P1 of bad loans, the bank has conservatively set aside a loss buffer of P1.34.
Noninterest income likewise grew 14 percent, driven by a 15-percent increase in fee-based businesses.
Nonperforming loans ratio, a key indicator of asset quality, stood at 1.77 percent.
This translated to a return on average common equity of 14.1 percent for the period.
The country’s leading lender said the Philippines would remain “resilient” despite persistent trade tensions triggered by higher tariffs imposed by the United States, as well as controversial local issues hounding politicians and government offices.
BDO said the local market could find support from “stable inflation and strong domestic consumption.”
“Meanwhile, the bank’s robust capital foundation and diversified business portfolio position it well to navigate current risks and capitalize on emerging growth prospects,” it said.
For the full-year 2025, an official previously said earnings growth may “be a little less” amid the central bank’s rate-cut cycle.
“And it’s because of the expected decline in interest rates. Spreads will be affected. It will still have growth, but probably not at the same level as last year,” Nestor Tan, company president and chief executive officer, said earlier this year.
