BDO's nine-month profit edges up 0.8% as loans grow 16% and its NPL ratio falls

Implications for lenders

Banks growing loans at 16% while CASA grows 5% may price funding lines to non-bank lenders higher, so lenders can review funding costs and tenors. The contrast between 1.60% at BDO and 2.50% at BPI suggests that loan segment mix can matter as much as growth targets.

Implications

Facts

BDO Unibank, the largest Philippine bank, reported net income of PHP 63.6 bn for the first nine months of 2026, up from PHP 63.1 bn a year earlier, a rise of 0.8%. ¹ It set aside PHP 17.7 bn in provisions for impairment losses, including pre-emptive provisions linked to the Middle East crisis. ² Net interest income rose 11% and return on equity was 13.1%.

Gross customer loans grew 16% year on year to PHP 4.1 trn, with double-digit growth in all loan segments; the bank did not give segment figures. ³ Total deposits rose 11% and current and savings account (CASA) deposits rose 5%. The NPL ratio fell to 1.60%, down from 1.77% a year earlier, and NPL coverage stayed at 132%. ⁴

Analysis

Cross-bank: BDO and BPI, the two largest private banks, both grew loans faster than the system, but with different credit outcomes. BDO's loans grew 16% with its NPL ratio falling to 1.60% and coverage at 132%. BPI's loans reached PHP 2.7 trn, up 13.6% year on year, its NPL ratio rose to 2.50% and coverage fell to 89.6%, after provisions rose 69.2% and nine-month profit fell. For the banking system, loans grew 11.4% and the NPL ratio was 3.27% in September, while system profit rose 4.25%.

Funding: at BDO, loans grew faster than total deposits (11%) and much faster than low-cost CASA deposits (5%). With the BSP's policy rate at 5.50% after the October hike, a funding mix that shifts toward time deposits can raise funding costs for fast-growing lenders.

Counterpoints and uncertainties

BDO did not disclose segment loan growth or segment NPLs, so the consumer-credit picture is incomplete. The fall in its NPL ratio partly reflects fast loan growth enlarging the denominator; asset quality of new loans shows only with time. Pre-emptive provisions depend on how the Middle East crisis develops and could be released or increased.