LENDING & CREDIT | Cesar Tordesillas, Philippines

Philippines' BDO targets loan growth of 20%, income growth of 19%

BDO expects a loan growth of over 20-percent in the next three to five years with the expanding economy.


BDO loans grew 24 percent in 2011 and 23 percent for the first quarter this year. Tan said they have a mix oflending segments that contribute to post growth. "What will drive the loan growth is more opportunitiesespecially in the middle market."

Consumer loans accounts for 20 percent of the bank's total loan portfolio.

"What will be a factor is the expected improvement in the overall economy which will hopefully allow us togenerate income to fully invest," said BDO President and CEO, Nestor Tan.

"We've been growing more than 20 percent last year and in the first quarter this year, and if that continues then we need the capital to support our growth," Tan said about its capital raising efforts in listing its $1billion stock rights.

Tan said that bank is now "well ahead of the stricter Basel 3 capital requirements" and tier1 capital. "Inaddition, it will put BDO in a better position to support its expansion plans." After the capital raising, thebank's capital adequacy ratio is 20 percent total and 15 percent tier1, from 15 percent and 10 percentpreviously.

For this year, the bank is targeting an income growth of 19 percent to P12.5 billion this year.

As of the first three months of 2012, BDO profits rose to P2.8 billion from P2.4 billion the same period in 2011 with net interest income amounting to P8.4 billion, a flat growth year-on-year, while non-interest incomeincreased to P5.8 billion from P5.4 billion primarily from trading and fees.

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