February 28, 2017

BDO Company Update as of February 28, 2017

Earnings kept in line by revenue growth, lower provisions. 

BDO posted a net income of P25.7b in 2016, up 4% YoY but 1% off estimate. 

The 33% drop in trading gains to P4.8b was compensated by the 15% hike in net interest income, 30% growth in non-interest income, the 15% increase in fee-based income and P8.1b in insurance premiums. 

What further kept earnings within expectations was lower-than expected provisions. 

These trends may cause one's 2017E earnings estimate to changed minutely. However, BVPS estimate is 2.2% higher as assumed there are no special dividends this year, resulting in a higher TP of P129.40.