BDO Posts P40.7 Billion First-Half Profit as Loan Book Expands 15 Percent

Flat Earnings Mask Stronger Underlying Operations

BDO Unibank posted net income of P40.7 billion for the six months ended June, a marginal increase from P40.6 billion in the same period last year. The Sy-led institution attributed the modest bottom-line growth to higher provisions for potential credit losses, even as underlying business operations accelerated.

Return on equity stood at 12.7 percent, while shareholders' equity rose eight percent. The bank's book value per share climbed to P121.78.

The Philippines' largest lender by assets expanded its gross customer loan portfolio by 15 percent year-on-year to P3.9 trillion, outpacing industry growth. According to BDO, all loan segments delivered double-digit expansion during the period.

Net interest income, which accounts for the bulk of the bank's revenue, climbed 11 percent as lending activity intensified across corporate, commercial and consumer segments. Total deposits increased 13 percent, though low-cost current and savings accounts grew at a slower four percent pace.

Non-Interest Income and Operating Efficiency

Non-interest income contributed a four percent gain, driven primarily by a 14 percent increase from the bank's insurance operations. BDO has been building out its bancassurance platform as a revenue diversification strategy.

Operating expenses grew at a single-digit rate, allowing pre-provision operating profit to advance 12 percent. The controlled expense growth reflects ongoing digitalization efforts and branch network optimization.

The bank operates more than 2,000 consolidated branches and over 7,900 automated teller machines across the archipelago, maintaining its position as the country's largest bank in terms of assets, loans, deposits and trust funds under management.

Prudential Provisioning Despite Improving Asset Quality

BDO raised its provisions for credit losses during the first half, describing the move as a prudential measure against evolving risks in the operating environment. The bank did not disclose the exact peso amount of the increase.

The higher provisions came even as asset quality indicators improved. The non-performing loan ratio eased to 1.64 percent from 1.75 percent a year earlier, indicating better credit discipline and collection efforts. NPL coverage, which measures reserves held against bad loans, stood at 132 percent.

The provisioning strategy suggests management is taking a conservative stance amid uncertainty in the broader economic environment, including potential headwinds from slower global growth and domestic policy shifts.

Capital Buffers Remain Robust

BDO maintained strong capital ratios throughout the period. Its common equity tier 1 ratio stood at 13.1 percent, comfortably above regulatory minimums and providing ample cushion for future loan growth or potential stress scenarios.

The bank said it remains well-positioned to navigate prevailing uncertainties and capture opportunities in an evolving business environment, citing strong business fundamentals, a healthy balance sheet and market leadership.

Philippine banks have been balancing growth ambitions with risk management as the domestic economy adjusts to shifting interest rate dynamics and external pressures. BDO's approach of building provisions while expanding its loan book reflects the tension between capturing market share and maintaining prudent risk buffers in an uncertain macro environment.

The bank is scheduled to release its full-year results in early 2027. Analysts will be watching whether loan growth momentum continues and how provisioning trends evolve in the second half.