October 28, 2013

BDO Unibank nets P18.2b in 9M13

BDO Unibank (BDO, Buy) announced 9M13 net income of P18.2b, up 73% YoY. Total loans increased 17% YoY to P864b. Meanwhile, total deposits increased 40% YoY to P1.2t due to the steady growth of low-cost deposits and inflows from the BSP’s SDA facility. Net revenues increased to P56.8b, driven by a 16% increase in net interest income (P31.0b) and 36% increase in non-interest income (P25.8b).

Our take:BDO’s strong performance in 3Q2013 puts it on-track to meet its 2013 net income guidance of P20.4b. We estimate that BDO netted ~P4.1b in 3Q13 compared to P5.8b in 2Q13 and P10b in 1Q13. The deceleration in net income can be attributed mainly to the expected normalization of trading gains. Moving forward, we think that the bank’s consistent loan growth and strong deposit growth should bode well for core earnings growth. – WealthSec