BDO targeting PHP28-B net income for 2017

By , on April 21, 2017


The Sy-led BDO Unibank has penciled a PHP28 billion profit guidance for 2017, up from its record-high PHP26.1 billion net income in 2016.  (Photo: BDO Unibank/ Facebook)
The Sy-led BDO Unibank has penciled a PHP28 billion profit guidance for 2017, up from its record-high PHP26.1 billion net income in 2016. (Photo: BDO Unibank/ Facebook)

MANILA—The Sy-led BDO Unibank has penciled a PHP28 billion profit guidance for 2017, up from its record-high PHP26.1 billion net income in 2016.

In a briefing Thursday, BDO president and chief executive officer (CEO) Nestor Tan said loans and deposits, among others, will continue to help the bank achieve its income target.

In the first quarter of this year alone, the bank reported a 6 percent year-on-year rise in net income to PHP5.8 billion, boosted by net interest income, which rose 19 percent, and loans that went up 21 percent.

Net interest income in the first three months of the year amounted to PHP18.4 billion while loans reached PHP1.5 trillion.

Total deposits increased by 13 percent to PHP1.9 trillion, due mainly to the 17 percent expansion of low-cost deposits.

Tan said BDO officials remain optimistic of the continued robust performance this year, partly because of the government’s bid to strengthen infrastructure investment.

“We’re still positive on the local economy. The President’s (Rodrigo Duterte) emphasis on infrastructure spending is actually positive because not only will it create economic activity from expenditure but it will also have a multiplier effect because it will create jobs, jobs create consumption, consumption helps businesses, and businesses create jobs,” he said.

Tan also sees a rise in foreign direct investments to the Philippines, which he pointed out is “a result of the diplomatic effort of the government”.

“And as we speak, we already see a lot of investments from the Japanese and the Chinese,” he said.

The BDO chief said the domestic economy is also seen to benefit from the firming up of the US economy “in a big way”.

He however pointed out that risks remain and these include higher interest rates, weaker peso, uncertainty on the path of the proposed tax reform program, impact of the Trump policies, and geo-political concerns overseas.

He noted that there are doubts that the proposed tax reforms would not be approved in its original form and only the tax breaks will be okayed by lawmakers.

“Of course that’s a risk but we don’t think that that will happen,” he said.

Tan however pointed out that “against that backdrop, we expect sustained expansion on loans and deposits”.

“We think that the infrastructure projects will provide a huge upside, that’s why we’re all hoping that they come out on time,” he said.

BDO, he added, will focus on expanding its presence in the Visayas and Mindanao as against operations overseas vis-a-vis the ASEAN integration since the latter needs scale and size.

“If we do go overseas in the ASEAN, it will be a function of whether there is opportunity and where we can have a competitive advantage,” Tan said.

Asked whether BDO wants to be considered as among the country’s select Qualified ASEAN Banks (QABs), Tan said, “Definitely, because we want to be a bank that meets ASEAN standards… But at the moment, we are very focused on the local market.”