BDO sees drop in net profit resulting from higher loan loss provision

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MANILA, Philippines—The nation’s largest lender, BDO Unibank, noticed a 36.2 p.c drop in net profit final 12 months to P28.2 billion on bigger provisions for possible loan losses put aside through the difficult macroeconomic setting attributable to the COVID-19 pandemic.

BDO set facet loan loss provisions of P30.2 billion for 2020, a lot bigger than the P6.2 billion buffer booked in 2019. The financial institution mentioned this was in line with “prudent credit and provisioning policies, meant to further strengthen its balance sheet.”

The financial institution’s net curiosity revenue grew by 12 p.c to P133.7 billion, supported by a modest development in the loan e-book.

Loans managed to develop by 3 p.c to P2.3 trillion, pushed by shopper and company accounts. BDO mentioned it continued to help its borrowing purchasers, making certain uninterrupted entry to credit score amenities, in addition to granting loan moratoria below Bayanihan 1 and a couple of.

Low-cost deposits expanded by 17 p.c to P2.1 trillion, as purchasers have been capable of entry BDO services and products via its branches, automated teller machines (ATMs) and digital channels even throughout quarantine restrictions.

Non-interest revenue declined by 8 p.c to P55.2 billion, supported by fee-based revenue, buying and selling good points and insurance coverage premiums.

Business volumes have been initially disrupted by mobility restrictions, however have since begun to get better steadily, the financial institution mentioned.

Wealth administration, then again, remained resilient with belief volumes and costs sustaining development. Trading good points elevated whereas insurance coverage premiums grew modestly regardless of the preliminary affect of the lockdowns.

Operating bills decreased by 2 p.c to P112.6 billion attributable to a discount in advertising and volume-related bills.

On asset high quality, non-performing loans stood at 2.65 p.c of whole loans. For each P1 of loans that turned bitter, the financial institution has supplied P1.09 in cowl. As of yearend, whole loan loss reserves have been equal to three p.c of gross buyer loans, and are deemed to be “more than sufficient to cover for potential losses.”

TSB


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