BDO's PHP4b net income in 2Q13 well within analyst's expectation

Net earnings reached PHP14.1b in 1H13.

According to Maybank Kim Eng, BDO Unibank Inc reported 1H13 net earnings of PHP14.1b, more than doubling the PHP5.8b in 1H12.

Here's more from Maybank Kim Eng:

This accounts for 62% of our full-year estimate, 69% of management guidance and 77% of market consensus forecast. The implied 2Q13 net income is well within expectation at PHP4b, up 36% YoY.

Strong income contribution from business units. Net interest income went up 14^ to PHP19.8b in 1H13, driven by 12% increase in loans to PHP807b. Total deposits broke the one trillion mark as it grew 17% to PHP1.02t.

Loan-to-deposit ratio is about 79%. The banks one-page press statement also stated that non-interest income rose 81% to PHP20.3 as fee-based earnings grew 30% to PHP7.6b.

BDO failed to mention its trading gains for the quarter and how the recent market volatility affected its mark-to-market investments. The latter should be reflected in the bank's book value.

Keeping costs at single-digit growth. Gross operating profit jumped 40% in 1H13 while operating expenses were kept steady at 9% growth. Despite the rise in loans, NPL declined to 2.4% at end-June from 2.5% last quarter while reserve cover was at 148%. Tier 1 and CAR remain ample at 15.6% and 18.3% respectively.