BDO recently announced a 4.3 billion pesos of net income for the first half of 2020 versus the 20.1 billion pesos earned in the comparable period last year.
The Bank booked a total provision of 22.4 billion in anticipation of potential delinquencies due to the Covid 19 pandemic. These provisions are anticipatory in nature, and meant to safeguard the balance sheet. By recognizing the provisions upfront, BDO can now focus on growing its business as restrictions under ECQ/GCQ are gradually relaxed.
Meanwhile, core businesses held up well amid the COVID- 19 pandemic, with pre-provision operating income going up by 17%.
Net Interest Income likewise went up by 17%. Customer loans rose by 11% to 2.3 trillion pesos, while total deposits went up by 9% to 2.6 trillion pesos, driven by the 19% expansion in Current Account/Savings Account deposits which now account for 77% of total deposits.
As of end-June 2020, branch operations have been fully restored from only 45% at the start of the ECQ in mid-March 2020. Non-interest income settled at 24.8 billion pesos, led by fee-based income with 13.4 billion pesos and insurance premiums with 97 billion pesos.
Operating expenses dipped by one 1% to 56 billion pesos on lower volume-related expenses, and despite the additional costs and operational adjustments to adapt to the “new normal” to ensure the security, health, and safety of BDO employees and clients.
Gross non-performing loan ratio increased to 0.95% while NPL cover settled at 139.4%.
Total capital base settled at 367. 5 billion pesos, with Capital Adequacy Ratio and Common Equity Tier 1 ratio at 13.8% and 12.7%, respectively, despite the upfront provisions. These ratios are well above regulatory minimum and deemed sufficient to support the Bank’s anticipated asset growth as well as regular quarterly dividends.
Going forward, BDO believes that its solid balance sheet, sustained business growth, and dedicated team effort will allow the bank to weather the COVID-19 crisis and sustain its long-term performance post-pandemic.