BDO net income dips 10% in Q1 due to market conditions

BDO Unibank, Inc. (BDO) reported an 10 percent dip in net income to ₱8.8 billion in the first quarter of 2020, primarily due to the impact of weak capital market conditions on its investment portfolio.

Despite the Enhanced Community Quarantine (ECQ) imposed in mid-March, BDO's core lending and deposit-taking businesses continued to grow.

Customer loans increased by 11 percent to ₱2.2 trillion, with growth observed across all market segments, although some non-essential clients faced operational disruptions.

Total deposits rose by nine percent to ₱2.6 trillion, even with reduced branch operations in Metro Manila and Luzon due to mobility restrictions.

Non-interest income reached ₱9.0 billion, largely driven by fee-based income of ₱8.1 billion and insurance premiums of ₱3.9 billion.

Unrealized mark-to-market losses in BDO Life's equities and unit-linked portfolios contributed to consolidated trading and foreign exchange losses.

The bank maintained conservative credit and provisioning policies, setting aside ₱2.3 billion in provisions, with a stable gross non-performing loan (NPL) ratio of 1.3 percent and a high NPL cover of 151.4 percent.

BDO has implemented initiatives to safeguard asset quality, including rapid portfolio reviews of affected clients and sectors, and a reassessment of provisioning guidelines.