BDO president and CEO Nestor Tan said the bank’s performance reflects steady underlying business growth, although earnings were partly weighed down by market volatility.
BDO Unibank Inc. reported a net income of P20.1 billion in the first quarter, up by two percent from P19.7 billion a year ago, supported by sustained growth in its core businesses despite rising global uncertainties.
The bank said the modest earnings growth came even as it booked higher provisions as a “pre-emptive measure” against evolving geopolitical risks, particularly the ongoing conflict in the Middle East.
Gross loans rose by 16 percent to P3.8 trillion, driven by broad-based expansion across corporate, middle market and consumer segments, while net interest income increased by 11 percent.
Asset quality continued to improve, with the non-performing loan ratio easing to 1.68 percent from 1.77 percent a year earlier, while NPL coverage stood at 132 percent.
In a media briefing, BDO president and CEO Nestor Tan said the bank’s performance reflects steady underlying business growth, although earnings were partly weighed down by market volatility.
“Although you will see the first quarter (net income) is a little weak, but we think it’s a timing issue. We should be in a double-digit trend going into 2026 and the rest of the year,” he said.
“Net income was temporarily impacted by mark-to-market but still very strong. The slowdown in fee income has been compensated by the increase in insurance business. Asset quality stable. Book value per share continues to accrue,” Tan said.
Despite the challenging environment, BDO maintained a balanced loan portfolio, with around 50 percent in large corporates, 25 percent in consumer and 25 percent in the middle market.
“We have a balanced portfolio and the growth was evenly spread in three markets,” Tan said, adding that more than half of the consumer portfolio remains secured, largely backed by housing and auto loans.
Margins, meanwhile, have remained relatively stable despite previous rate cuts by the Bangko Sentral ng Pilipinas. “Margins, despite the 125-basis-point cut by the BSP last year, have gone down relatively slowly. It has held steady,” Tan said.
Looking ahead, Tan said the key risk to growth is the uncertainty surrounding the Middle East conflict, which could dampen business activity if prolonged.
“We don’t know how long the conflict will last. There is a possibility that corporate capital expenditure may slowdown if the conflict remains,” he said.
Still, the bank expects any impact to be temporary. “A temporary slowdown and then a pickup or normalization of activity,” Tan said, noting that economic activity remains stronger than during the pandemic period.
On credit quality, BDO is bracing for some deterioration, but said risks remain manageable for now. “Yes, we do expect delinquencies. But it depends on how long this crisis will last,” Tan said.
He added that pressures are likely to come mainly from the consumer segment, particularly unsecured lending such as credit cards, although current trends remain within expectations.
The bank has also undertaken pre-emptive provisioning for certain accounts to cushion potential risks.
At the same time, BDO continues to expand its footprint, with close to 2,000 branches and branch-lite units nationwide, while maintaining adequate capital to support growth.
Overall, BDO said its strong capital position, diversified business model and improving asset quality leave it well positioned to navigate near-term risks while sustaining growth.