The Market Monitor Minding the Nation's Business
Sy-led Banco de Oro Unibank Inc. (BDO) is targeting a 4 percent rise in net income this year to P26 billion, to be buoyed by the strength of the domestic economy, as well as core businesses, namely deposits and loans.
In a briefing last Friday, BDO President Nestor V. Tan cited the lender’s good numbers last year, referring to its P25 billion net income, stressing that it hopes to sustain it this year.
“We expect the positive (outcome) to continue although we are a little bit cautious,” he said.
Among the positive factors that the bank considers are the sound macrofundamentals of the economy, given the still-strong inflows from overseas Filipino workers, the rising income of the business-process outsourcing (BPO) sector, the resiliency of the consumer sector, and rising growth of provincial areas; and the good demographics.
However, risks remain, due to the weakness in global growth, uncertainties regarding the May 9 polls, and excess market liquidity.
Tan said earnings from corporate lending has gone down as big business forego their borrowings ahead of the election period, but he expects this to regain strength in the last quarter of the year, as what has been seen in the past election years.
Thus, the focus on BDO’s retail business, especially in the provincial growth areas.
In the first quarter, BDO posted a P5.5-billion net income, backed by core lending, deposit-taking and fee-based business.
Net interest income rose by 17 percent to P15.5 billion, lifted by the 15 percent increase in customer loans and deposits. Fee-based income increased by 11 percent in the same period.
Also, Tan said growth of remittances is seen to remain strong, despite the slowdown last year and the impact of the ongoing investigations on the laundering of the $81 million stolen from the Banglades Bank in February, which ended in the Philippines.
He said difficulty among Philippines-based banks and remittance firms to tap foreign counterparties started some five years ago, when Europe put in more stringent rules against money laundering.
In terms of security in their system, the BDO chief said this is embedded in all their processes.
“Security has to apply in every process that we undertake…It’s not an add-on.It’s in everything that we do. It’s a cultural thing,” he said.
With regard to identity theft vis-a-vis the hacking of the Commission on Elections (Comelec) website, Tan said the bank is now in the process of changing the process of identity validation.
He declined to elaborate, but said that the change “will be gradual.
RIZA LOZADA