Money

BDO first half earnings plunge 79% as bad loan provisions surge

Sy-led BDO Unibank’s first half net income plummeted 79% to P4.3 billion as it stepped up provisions for bad loans to weather the fallout of the coronavirus pandemic.

BDO set aside a total of P22.4 billion to cover future loan defaults stemming from the global health crisis and safeguard its balance sheet.

“By recognising the provisions upfront, the bank can now focus on growing its business as restrictions under ECQ/GCQ are gradually relaxed,” BDO said in a statement.

Net interest income grew 17%. Customer loans went up 11% to P2.3 trillion while total deposits increased by 9% to P2.6 trillion, driven by the 19% expansion in current account/savings account deposits which now account for 77% of total deposits.

Non-interest income amounted to P24.8 billion, led by fee-based income (P13.4 billion) and insurance premiums (P7 billion).

BDO said its balance sheet remains solid with total capital base of P367.5 billion and adequacy capital ratio and common equity tier 1 ratios well above regulatory minimum level.

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