Key highlights:
• Profitability is steady and improving,
• Growth is broad-based and sufficiently diversified,
• Balance sheet remains strong and solid; NPLs continue to decline while
provisioning levels continue to increase.
BOO Unibank, Inc. (BOO) grew its net income to P40.0 billion in the first nine months of
2022 vs. P,32.4 billion in the comparative period last year on solid results across its core
businesses. This translates to a Return on Average Common Equity (RaCE) of 12.4%,
compared to 10.7% posted a year-ago.
Gross customer loans went up by 10% year-on-year (YoY) , largely funded by low-cost
Current Account/Savings Account (CASA) deposits. Due to its high CASA base, net
interest income increased to P,1 OB.1 billion.
Non-interest income rose to P,53.2 billion led by 20% expansion in fees and insurance
premiums, while trading and forex gains were broadly in line with expectation and
primarily generated by flow-related business. Gross operating income amounted to
P,161.3 billion.
Operating expenses (aPEX) rose to P,9B.1 billion, as the Bank continued its branch
expansion activities in underserved markets in the rural areas, and sustained
Information Technology (IT) spend to support its digital initiatives.
Asset quality improved as the Bank’s NPL ratio went down further to 2.23%. Still, the
Bank maintained its conservative provisioning policy by setting aside provisions of
P,12.2 billion, resulting in a higher NPL coverage of 152%.
Total capital increased to ~444.6 billion, with Capital Adequacy Ratio (CAR) and
Common Equity Tier 1 (CET1) Ratio both comfortably above regulatory minimum at
14.4% and 13.3%, respectively.
The Bank has opened a total of 64 branches this year, most of which are in rural areas
covered by its subsidiary BOO Network Bank Inc. This brings the Bank’s total branches
to 1,608 as of September 30, 2022. This is part of the Bank’s initiative to help improve
financial inclusion, by providing access to financial services in less dense areas.
Despite the Bank’s strong performance year to date, management is conscious of
external headwinds brought about by slowing global growth, persistent inflation, and
lingering uncertainties related to the Covid-19 pandemic. BOO nonetheless believes
that its established business franchise and strong balance sheet allows the Bank to
overcome near-term risks and achieve long-term sustainable growth.