FINANCIAL RATIO

ANALYSIS: BDO
Unibank Inc. &
Subsidiaries
FINANCIAL MANAGEMENT
BSACC 3A
FATIMA REAL | IRENE QUINAGORAN | JERIANE SARMIENTO | MARICAR ZILLABO | TRIECHIA LAUD | 

1|Page
Table of Contents
I. COMPANY........................................................................................................................................................................................................ 1
A. CORPORATE MISSION................................................................................................................................................................................ 1
B. CORPORATE VISION................................................................................................................................................................................... 1
C. CORE VALUES.............................................................................................................................................................................................. 2
 Commitment to Customers.......................................................................................................................................................................... 2
 Commitment to a Dynamic and Efficient Organization...............................................................................................................................2
 Commitment to Employees.......................................................................................................................................................................... 2
 Commitment to Shareholders.......................................................................................................................................................................2
D. CORPORATE GOVERNANCE...................................................................................................................................................................... 2
E. CORPORATE SOCIAL RESPONSIBILITY..................................................................................................................................................3
F. ENVIRONMENTAL INITITATIVES............................................................................................................................................................3
II. THE MANAGEMENT...................................................................................................................................................................................... 4
1. Management Plans........................................................................................................................................................................................... 4
2. Management Status.......................................................................................................................................................................................... 4
3. Management Issues.......................................................................................................................................................................................... 5
III. FINANCIAL STATEMENTS.......................................................................................................................................................................6
IV. MANAGEMENTS DISCUSSION AND ANALYSIS................................................................................................................................10
A. BALANCE SHEET....................................................................................................................................................................................... 10
B. INCOME STATEMENT............................................................................................................................................................................... 10
V. FINANCIAL RATIO ANALYSIS.................................................................................................................................................................. 12
A. LIQUIDITY PERFORMANCE..................................................................................................................................................................... 12
 Short-term Solvency Analysis.................................................................................................................................................................... 13

2|Page
 B. LEVERAGE PERFORMANCE.................................................................................................................................................................... 13
........................................................................................................................................................................................................................... 14
 Long-term Solvency Analysis.................................................................................................................................................................... 14
C. ACTIVITY PERFORMANCE...................................................................................................................................................................... 15
D. PROFITABILITY PERFORMANCE............................................................................................................................................................18
 Profitability Analysis................................................................................................................................................................................. 21
VI. FINANCIAL FORECAST.......................................................................................................................................................................... 22
VII. FINANCIAL FORECAST INDICATORS................................................................................................................................................24
 Real GDP Growth.......................................................................................................................................................................................... 24
 Inflation......................................................................................................................................................................................................... 24
 Foreign Exchange.......................................................................................................................................................................................... 24
VIII. APPENDICES.............................................................................................................................................................................................. 25

3|Page
 I. COMPANY

BDO Unibank, Inc., commonly known as Banco de Oro (BDO), is a member of SM Group which is also the largest bank in
the country by market capitalization. It was established on January 2, 1968, as Acme Savings Bank, a thrift bank with just two
branches in Metro Manila. In November 1976, Acme was acquired by the SM Group, the group of companies owned by retail
magnate Henry Sy and renamed Banco de Oro Savings and Mortgage Bank into Banco de Oro Commercial Bank in December 1994.
In September 1996, BDO became a universal bank, which led to the bank's name being changed to the current Banco de Oro Universal
Bank (BDO Unibank).

BDO is a full-service universal bank in the Philippines. It provides a complete array of industry-leading products and services
including Lending (corporate and customer), Deposit-taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards,
Corporate Cash Management and Remittances in the Philippines.

BDO’s institutional strengths and value-added products and services hold the key to its successful business relationships with
customers. Its branches remain at the front of setting high standards as a sales and service- oriented, customer focused force.

A. CORPORATE MISSION

To be the preferred bank in every market we serve by consistently providing innovative products and flawless delivery of
services, proactively reinventing ourselves to meet market demands, creating shareholders value through superior returns, cultivating
in our people a sense of pride and ownership, and striving to be always better than what we are today… tomorrow.

B. CORPORATE VISION
To be the leading Philippine bank and financial services company that empowers customers to achieve their goals and
aspirations, combining our entrepreneurial spirit, international perspective, and intense customers focus to deliver a

4|Page
 personalized banking experience that is easy, straightforward, and convenient, while taking pride in building long-term
relationships and finding better ways to deliver offerings of the highest standard.

C. CORE VALUES
 Commitment to Customers
BDO is committed to deliver products and services that surpass customer expectations in value and every aspect of customer
service, while remaining to be prudent and trustworthy stewards of their wealth.

 Commitment to a Dynamic and Efficient Organization

BDO is committed to creating an organization that is flexible, responds to change and encourages innovation and creativity. It
is committed to the process of continuous improvement in everything it does.

 Commitment to Employees
BDO is committed to its employees’ growth and development and it nurtures them in an environment where excellence,
integrity, teamwork, professionalism and performance are valued above all else.

 Commitment to Shareholders
BDO is committed to provide its shareholders with superior returns over the long term.

D. CORPORATE GOVERNANCE
Banco De Oro’s corporate governance is anchored on five basic principles: accountability, fairness, integrity, transparency,
and performance. Banco De Oro’s corporate governance is deeply rooted in its corporate culture as it believes that effective
governance is a collective effort of its directors, officers, and staff. The bank upholds the highest standards of ethical behavior and
responsible conduct of business as it protects the interests of and creates value for its shareholders.

5|Page
 E. CORPORATE SOCIAL RESPONSIBILITY
The Bank carries out its corporate social responsibility (CSR) through BDO Foundation, the CSR arm of BDO Unibank, which
promotes initiatives based on the Bank’s long-standing record of support to social development. The Bank’s CSR projects involve the
following: relief operations in disaster-stricken provinces; rehabilitation/reconstruction of rural health centers; construction of houses
in resettlement areas, multi-purpose halls and school buildings; and support for livelihood projects for families with disabled members
(person with disabilities).
Also, BDO Foundation actively promotes volunteerism among its employees who help out in the Foundation’s various
activities that include, among others, community building, livelihood/skills training, fund raising, and environmental/green initiatives.
Through these, the Bank hopes to give back to society and make a positive contribution to the broader community it serves.

F. ENVIRONMENTAL INITITATIVES
BDO imposes limits and monitors exposure to certain industries, e.g., Gaming, Tobacco and Alcohol, as well as restricts
lending to other sectors under the Exclusion List (those deemed to have adverse or harmful effects to the community and the
environment).
Through its Sustainable Energy Finance (SEF) Program in cooperation with IFC, the Bank supports green energy investments
in Energy Efficiency (EE) and Renewable Energy (RE) projects. Further, the Bank has a tie-up with the Japan Bank for International
Cooperation (JBIC) for the latter’s Green Facility, a USD50 million relending credit facility open to RE, EE, and Green building
projects which reduce Greenhouse gas emissions.
As well, the Bank issued the BDO Green Bond amounting to USD150 million to exclusively finance climate-smart projects
and help contribute to the development of climate finance market in the country. The BDO Green Bond is the first green bond by a
commercial bank in the Philippines and is the IFC’s first green bond investment in a financial institution in East Asia and the Pacific.

6|Page
 II. THE MANAGEMENT
1. Management Plans
 The bank intends to complement the expansion in its physical network with digital capabilities, to accelerate the pace of
financial executive.
 The bank has also embarked on initiatives to enhance operational efficiency, enrich the customer experience and reduce cost in
the long-term.

2. Management Status
BDO has the largest distribution network with over 1,300 operating branches and more than 4,400 ATMs nationwide. BDO
has positioned itself for increased balance sheet strength and continuing expansion into new markets.
Date Price Open High Low Close Volume Change %
9/9/2020 91.25 93 93 91.1 91.25 3075490 -2.41%
8/28/20 86.00 87.1 87.35 86 86 6172430 -1.21%
7/30/20 88.00 90.3 90.3 88 88 2598920 -2.76%
6/30/20 98.00 96 98.9 95.5 98 4386900 4.26%
5/29/20 100.40 92 100.4 92 100.4 1733976 11.12%
0
4/30/20 101.00 100.1 101 98.6 101 2716910 2.33%
3/31/20 103.50 103.5 106 102.5 103.5 3697910 4.33%
2/28/20 139.00 138 142 138 139 3298590 -2.80%
1/31/20 148.00 153.9 153.9 145.6 148 4365280 -3.90%
1/2/20 154.00 153.8 154 152.1 154 1663060 -2.53%

Table 1: BDO’s stock summary

7|Page
 The table above shows the flow of stock prices of BDO from January 1, 2020 to September 09, 2020. As of September 09, 2020,
the stock price of BDO went down from PHP154.00 on January 1, 2020 to PHP91.25 on September 09, 2020.

3. Management Issues
In 2017, BDO faced complaints of unauthorized transactions. The Bank admitted an “extraordinary rise” in fraud attacks
towards the entire industry starting 0ctober of 2017. There has been an increased number of clients that have experienced unauthorized
bank account transactions, which involve the withdrawal and purchases from their accounts. Some of the clients who fell victim to
these incidents are overseas Filipino workers.
In 2018, BDO Unibank, Inc. has settled the account balances of depositors who have been affected by unauthorized
withdrawals and purchases.

8|Page
III. FINANCIAL STATEMENTS
BDO UNIBANK INC. & SUBSIDIARIES
CONDENSED STATEMENT OF FINANCIAL POSITION

As of June 30, 2020 As of Dec. 31, 2019

RESOURCES
CASH AND OTHER CASH ITEMS P 69,846 P 64,140
DUE FROM BANGKO SENTRAL NG PILIPINAS 387,342 309,040
DUE FROM OTHER BANKS 58,833 38,956
TRADING AND INVESTMENT SECURITIES
Financial Assets at FVTPL 27,373 27,081
Financial Asset at FVOCI 148,092 145,239
Investment Securities at Amortized cost-net 248,402 263,585
LOANS AND OTHER RECEIVABLES-NET 2,273,343 2,225,777
PREMISES, FURNITURE, FIXTURE, AND EQUIP.-NET 44,917 46,551
INVESTMENT PROPERTIES 16,693 16,911
EQUITY INVESTMENTS-NET 4,795 4,890
DEFERRED TAX ASSETS 8,730 8,927
OTHER RESOURCES-NET 29,379 37,761
TOTAL RESOURCES P 3, 317, 745 P 3, 188, 858

LIABILITIES AND CAPITAL FUNDS

DEPOSIT LIABILITIES
Demand P 273, 801 P 232, 995
Savings 1, 737, 939 1,589,639
Time 595,672 662,594
Total Deposit Liabilities 2,607,412 2,485,228
BILSS PAYABLE 179,274 167,524
SUBORDINATED NOTES PAYABLE - 10,030
INSURANCE CONTRACT LIABILITIES 50,798 42,473
OTHER LIABILITIES 112,779 113,016
Total Liabilities P 2,950,263 P 2,818,271

9|Page
EQUITY
Attributable to Shareholders of the Parent Company 365,851 368,932
Non-controlling Interest 1,631 1,655
Total Equity 367,482 370,587
TOTAL LIABILITIES AND EQUITY P 3,317,745 P 3,188,858

NOTE: Amounts in Millions of Pesos

10 | P a g e
 BDO UNIBANK INC. & SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME

For the six month-period ending

June 30, 2020 June 30, 2019
INTEREST INCOME ON
Loans and Other Receivables P 71,622 P 70,946
Trading and Investment Securities 8,127 7,908
Due from BSP and Other Banks 1,119 533
Others 21 36
Total Interest Income 80,889 79,423

INTEREST EXPENSE ON
Deposit Liabilities 10,331 18,586
Bills Payable and Other Borrowings 3,799 3,910
Finance Lease Liabilities 364 1
Total Interest Expense 14,494 22,497
NET INTEREST INCOME 66,395 56,926
IMPAIRMENT LOSSES 22,434 2,988
NET INTEREST INVOME AFTER IMPAIRMENT LOSSES 43,961 53,938

OTHER OPERATING INCOME

Service Charges, Fees, and Commissions 11,610 14,979
Trading Gain (Loss)-net 1,795 1,990
Trust Fees 1,811 1,702
Foreign Exchange Gains 606 1,602
Insurance Premiums 7,031 6,853
Miscellaneous-Net 1,932 2,383
Total Other Operating Income 24,785 29,509

OTHER OPERATING EXPENSES

Compensation and Benefits 17,633 15,916

11 | P a g e
 Occupancy 4,415 5,144
Taxes and Licenses 6,809 7,081
Security, Clerical, Messengerial and Janitorial 1,914 1,944
Insurance 2,668 2,606
Advertising 2,321 2,397
Litigation on Assets Acquired 294 265
Policy Reserves 2,134 4,586
Insurance Benefits and Claims 1,605 1,015
Miscellaneous 16,240 15,547
Total Other Operating Expenses 56,033 56,501

NET INCOME BEFORE INCOME TAX 12,713 26,946

TAX EXPENSE 8,461 6,806
NET INCOME AFTER TAX P 4,252 P 20,140

NOTE: Amounts in Millions of Pesos

12 | P a g e
IV. MANAGEMENTS DISCUSSION AND ANALYSIS
A. BALANCE SHEET
 Cash and Other Cash Items as well as DUE from BSP grew 9% and 25% to P 69.8 billion and P 387.3 billion,
respectively following deposit growth and a move to invest in more liquid assets.
 Due from Other Banks hiked 51% to P 58.8 billion owing to higher placements and working balances with
correspondent banks.
 Net loans and Other Receivables inched up to 2% to P 2.3 trillion coming from increases in Customer Loans,
Interbank Loans and Securities Purchased Under Reverse Repurchase Agreements.
 Other resources dropped to 22% to P 29.4 billion primarily due to lower volumes of outstanding credit card
transactions as of the cut-off date.
 Total Deposits went up 5% to P 2.6 trillion as Demand and Savings deposits hiked 18% and 9%, respectively.
Time deposits, on the other hand, went down 10%.
 Bills Payable increased 7% to P 179.3 billion following the issuance of the P 40.1 billion fixed rate bonds in
February 2020.
 The bank redeemed its P 10 billion Subordinated Notes Payable in March 2020.
 Insurance Contract Liabilities climbed 20% to P 50.8 billion due to re-

B. INCOME STATEMENT
 The Bank reported a Net Income attributable to Equity Holders of the Parent Company of P 4.3 billion, a 79%
decline from the P 20.1 billion for the same period last year. This, however, includes a P 22.4 billion upfront
Provision for impairment losses in anticipation of a possible increase in the Banks nonperforming loans, due to
the Covid-19, pandemic and the resulting Enhanced and General Community Quarantine imposed across the
country.
13 | P a g e
  Pre-provision Operating Income, however, remained strong growing at 17% to P35.1 billion year-on-year, as
the Banks core business exhibited resilience despite the pandemic.
 Net interest income expanded 17% to P 66.4 billion from higher margins and a growth in the Banks interest
earnings.
 Other income declined 16% to P 24.8 billion owing to the following:
 Trading gain went down 10% to P 1.8 billion due to volatile market conditions.
 Trust fees rose 6% to P 1.8 billion on higher level of funds managed.
 Foreign exchange gain slid 62% to P 606 million on lower transaction volumes due to the pandemic.
 Service charges and fees as well as other income dropped 22% and 19% to P 11.6 billion and P 1.9
billion, respectively, on scaled down business operations due to the ECQ/GCQ brought about by the
Covid-19 pandemic.
 Operating expenses slightly declined by 1% to P 56.0 billion due to the following:
 Employee benefits grew 11% from a higher manpower count as well as allowances and benefits to
employees during the ECQ/GCQ period.
 Occupancy expenses dropped 14% following the newly implemented lease accounting standard.
 Litigation/Assets acquired expense rose 11% from higher costs relating to litigation and maintenance
of acquired assets.
 Policy reserves were 53% lower from the revaluation of BDO Life’s unit-linked funds following
adverse market movements.
 Insurance benefit and claims climbed 58% from higher BDO Life business volumes.
 Tax expense hiked 24% to P 8.5 billion on a higher taxable income base.

14 | P a g e
 V. FINANCIAL RATIO ANALYSIS
Discussion of the company’s key performance indicators. It shall include a discussion of the manner by which the company
calculates or identifies the indicators presented on a comparable basis.

A. LIQUIDITY PERFORMANCE
Liquidity indicates the ability of the bank to meet its financial obligations in a timely and effective manner. Liquidity is the life
and blood of a commercial bank. In other words, can a company quickly convert its assets to cash without a loss in value if
necessary to meet its short-term obligations? Favourable liquidity ratios are critical to a company and its creditors within a
business or industry that does not provide a steady and predictable cash flow. They are also a key predictor of a company’s
ability to make timely payments to creditors and to continue to meet obligations to lenders when faced with an unforeseen
event.

The Current Ratio for BDO

Unibank Inc. & Subsidiaries is
30.01%, which compared to the
baseline of 30.57% indicates
CURRENT RATIO
the banks’ ability to service
short-term obligations is still
CURRENT RATIO
30.57%

satisfactory though it declined

by 0.56% owing to customer
loan growth. The ratio reflects
the number of times short-term
assets cover short term
liabilities. The ratio indicates
30.01%

that the bank has a strong

ability to cover short-term
obligations.
15 | P a g e

2020 2019
  Short-term Solvency Analysis
As shown on the statement of financial position, Cash and Other Cash Items as well as DUE from BSP grew 9% and 25% to P
69.8 billion and P 387.3 billion, respectively following deposit growth and a move to invest in more liquid assets. It can be
observed that accounts payable and bank loans increased significantly. Total Deposits went up 5% to P 2.6 trillion as Demand
and Savings deposits hiked 18% and 9%, respectively. Time deposits, on the other hand, went down 10%. Bills Payable
increased 7% to P 179.3 billion following the issuance of the P 40.1 billion fixed rate bonds in February 2020. These factors
highly contributed to the decline of liquidity ratio to 30.01% owing to the customer loan growth which means the company
may have many problems in paying short-term obligations.

B. LEVERAGE PERFORMANCE
Leverage ratios measure the relative
DEBT TO EQUITY RATIO amount of funds supplied by equity
DEBT TO EQUITY RATIO and debt holders. The focus is on the
803%

long-term solvency of the firm.

These ratios assess a company’s
The Debt to Equity Ratio for
ability BDOto meet its long-term
Unibank Inc. &
obligations,
Subsidiaries
remain is solvent,
803%, whichand
774%

compared toIt the

avoid bankruptcy. baseline
measures howof
774% indicates that the bank
well a company’s cash flow covers
has a growth in liabilities which
its short-term financial
outpaced obligations.
the increase in total
equity. Debt to equity went upt
to 803% which means that for
2020 2019 every peso in equity, there is an
16 | P a g e 8.03 peso in leverage. The ratio
is high but is common since
banks carry higher amount of
debts, they borrow in capital in
17 | P a g e
 The Debt to Total Assets ratio for
DEBT TO ASSETS RATIO BDO Unibank Inc. & Subsidiaries is
89%, which compared to the
DEBT TO ASSETS RATIO
baseline of 88% indicates the

89%
company should be able to
withstand losses without harming
creditor interests or could obtain
additional financing if desired.
which means that 89% of the
total assests is being financed by

88%
creditors and the 11% is
financed by the owners. This
ratio shows the portion of debt the
bank is carrying relative to its
assets. This is also due to the
2020 2019 increase in liabilities of the bank.

 Long-term Solvency Analysis

A comparison of the trends in total liabilities and equity reveals that the former increased and the latter declined. As a result of
these variations, the creditors' margin of safety decreased significantly. A greater reliance on creditor funds rather than on equity
funds decreased the margin of safety of the creditors and therefore weakened the financial position of the company.

18 | P a g e
 C. ACTIVITY PERFORMANCE

The Activity Ratios show the connection between sales and a given asset. It indicates the investment in one particular group of
assets and the revenue the assets are producing. Activity ratios play an active role in evaluating the operating efficiency of the
business as it is not only shows how the company generates revenue but also how well the company is managing the
components in its balance sheet.

N E T F IX E D A S S E T S T O E QU IT Y R A T IO The Net Fixed Assets to Equity

Ratio for BDO Unibank Inc. &
NET FIXED ASSETS TO EQUITY RATIO
28.76%

Subsidiaries is 28.76%, which

compared to the baseline of
12.56% indicates the company's
performance is adequate in this
area. This shows that the bank
invested much in fixed assets in

12.56%
relation to net worth.

2020 2019

19 | P a g e
 FIXED ASSETS TURNOVER RATIO
FIXED ASSETS TURNOVER RATIO

The Fixed Assets Turnover Ratio

for BDO Unibank Inc. &
Subsidiaries is 235.27% which

234%
235%
compared to the baseline of 234%
indicates the company is
productively making use of its
fixed assets to effectively generate
revenues.

2020 2019

20 | P a g e
 The Sales to Assets Ratio for BDO
Unibank Inc. & Subsidiaries is SALES TO ASSETS RATIO
6.37% which compared to the
baseline of 7.19% indicates the SALES TO ASSETS RATIO

7.19%
company's performance in this
area is lacking and management
should consider taking measures
to improve this ratio. It has
decreased by 0.82% from the

6.37%
same period from previous year.
This indicates that the efficiency
of asset management by the bank
has decreased. This ratio shows
that the bank is not doing well in
making its assets in producing
revenues.
2020 2019

21 | P a g e
 D. PROFITABILITY PERFORMANCE

Profitability ratios measure a company’s ability to use its capital or assets to generate profits. Improving profitability is a
constant challenge for all companies and their management. Evaluating profitability ratios is a key component in determining
the success of a company.

NET PROFIT MARGIN The Net Profit Margin for BDO

18.49%
Unibank Inc. & Subsidiaries is
NET PROFIT MARGIN
4.02% which compared to the
baseline of 18.49% indicates
revenues may not be contributing
enough to the company's bottom
line. This is due to lower net
income of the current period.
4.02%

2020 2019

22 | P a g e
 The Net Interest Margin for BDO
Unibank Inc. & Subsidiaries is
4.36% which compared to the
baseline of 3.99% indicates that
the bank is highly contributed
from growth in interest-earning
assets and an improvement in
funding mix.

23 | P a g e
 N E T IN TON
RETURN E R EINVESTMENT
S T MA R GIN
The Return on Investment for BDO

4.36%

1.33%
Unibank Inc. & Subsidiaries is NET INTEREST
RETURN MARGIN
ON INVESTMENT
0.26% which compared to the
baseline of 1.33% indicates there
is a need for improvement in this
area to ensure the company can
remain competitive and continue
to operate successfully. This ratio

3.99%
shows that the bank was not able
to use effectively the company's

0.26%
assets to generate profits.
However, this is still higher than
the industry average which is
1.15%. This means that the bank is
performing well despite the
2020 2019
decrease in revenue.

24 | P a g e
 The Return on Equity for BDO Unibank
Return On Equity Inc. & Subsidiaries is 2.27% which
compared to the baseline of 12%
Return On Equity

12.00%
indicates that the management may not
be effectively managing the profits
earned based on the owners investment
in the company. The rate of return on
equity capital employed is relatively low
as well as the ability of the company's
management to realize an adequate
return on the capital invested by the
owners in a company. This decline
2.27%

indicates that the company has

generate low profits from its
investment during the six-month
period, thus making dividend pay-out
2020 2019 less likely.

 Profitability Analysis
It will be observed that both net interest income and impairment losses showed upward trends with impairment losses
increasing at a faster rate. These data reflect an unfavourable situation from the point of view of managerial ability to control
impairment relative to change on revenues. This less desirable percentage may have been the result of one or more factors such
as impairment losses in anticipation of a possible increase in the Banks nonperforming loans, due to the Covid-19, pandemic
and the resulting Enhanced and General Community Quarantine imposed across the country.

A favourable tendency is reflected by the fact that trend percentages for interest expense on deposit liabilities, bills payable and
other borrowings decreased at a faster rate than the interest income.

25 | P a g e
VI. FINANCIAL FORECAST
BDO UNIBANK INC. & SUBSIDIARIES
CONDENSED STATEMENTS OF FINANCIAL POSITION

PROJECTIONS
2021 2022
ASSETS
Liquid Assets P 657,638 P 806,283
Investments 466,253 536,191
Net Loans and Receivables 2,364,277 2,458,848
Other Assets 126,532 129,072
TOTAL ASSETS 3,611465 3,930,394

LIABILITIES
Deposit Liabilities 2,868,153 3,154,969
Bills Payable and Other Borrowings 253,079 278,387
Other Liabilities 113,490 113,966
TOTAL LIABILITIES 3,234,722 3,547,322
TOTAL SHAREHOLDERS EQUITY 376,743 383,072
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 3,611,465 3,930,394

NOTE: Amounts in Millions of Pesos

26 | P a g e
 BDO UNIBANK INC. & SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME

PROJECTIONS
2021 2022
Net Interest Income P 122,167 P 173,477
Provision for Impairment Losses 80,987 97,184
Net Interest Income After Provisions 41,180 76,923
Other Operating Income 34,203 47,201
Other Operating Expenses 58,274 59,439
Profit Before Tax 17,109 64,685
Tax Expense 5,073 12,184
Net Profit 12,036 52,501

NOTE: Amounts in Millions of Pesos

27 | P a g e
VII. FINANCIAL FORECAST INDICATORS
 Real GDP Growth
The Philippine economy remained a standout among its regional peers for the past few years. But, due to the
economic disruption brought about by the Covid-19 pandemic it posted a real decline by 16.5%. Taking this
into account, total assets has a consistent increase of 9% for two consecutive years as the economy is still
coping with the effects of the pandemic. This will be driven by increased investments and higher consumer
demand. It is also expected to be supported by increase infrastructures spending, for the healthcare sector, and
sustained consumer demand, on the back of Overseas Filipino Workers remittances and increasing Business
Process Outsourcing revenues as it is one of the booming industries to date.

 Inflation
Headline inflation is remaining subdued to 2.7% amid sluggish demand due to the Covid-19 pandemic. The
upward pressures combined from the impact of Covid-19 pandemic induced supply disruptions, demands, and
increasing fuel prices are seen lifting consumer prices in the remaining month of the year. This affects the
saving capabilities of customers which also directly affects the interest income of the bank. Customers will have
low capabilities since their incomes will be largely allocated to their purchases.

 Foreign Exchange
The Philippine Pesos weakening trend against the US dollar continued into 2016, with the average peso-dollar
rate depreciating by 3.0% year to date to close at P as of end August 2020. This was generally due to the
combined impact of a possible US Fed fund rate hike and shrinking account surplus. These would be the same
factors that may drive the peso weaker going forward in 2021, despite structural support from OFW remittances
and BPO revenues. This also has affected the financial forecast of BDO for the next two years because it will
highly affect foreign exchanges and translation gains of the bank.

28 | P a g e
VIII. APPENDICES

Appendix 1: BDO STOCKS RATE

Date Price Open High Low Close Volume Change %
9/9/2020 91.25 93 93 91.1 91.25 3075490 -2.41%
8/28/20 86.00 87.1 87.35 86 86 6172430 -1.21%
7/30/20 88.00 90.3 90.3 88 88 2598920 -2.76%
6/30/20 98.00 96 98.9 95.5 98 4386900 4.26%
5/29/20 100.40 92 100.4 92 100.4 17339760 11.12%
4/30/20 101.00 100.1 101 98.6 101 2716910 2.33%
3/31/20 103.50 103.5 106 102.5 103.5 3697910 4.33%
2/28/20 139.00 138 142 138 139 3298590 -2.80%
1/31/20 148.00 153.9 153.9 145.6 148 4365280 -3.90%
1/2/20 154.00 153.8 154 152.1 154 1663060 -2.53%

Appendix 2: LIQUIDITY RATIOS

Amount CURRENT
(in RATIO
millions
of pesos)
CURRENT 2,950,263 30.01%
ASSETS
CURRENT 367,482
LAIBILITIES

Six-month ending 30.57%

2019

29 | P a g e
Appendix 3: LEVERAGE RATIOS

Amount (in DEBT TO DEBT TO

millions of EQUITY ASSETS
pesos)
TOTAL DEBT 2,950,263 803%
SHAREHOLDERS 367,482
EQUITY
TOTAL DEBT 2,950,263 89%
TOTAL ASSETS 3,317,745
Six-month ending 774% 88%
2019

Appendix 4: ACTIVITY RATIOS

Amount Net Fixed Fixed Asset Sales to

(in Assets to Turnover Assets
millions Equity Ratio
of pesos)
Fixed Assets 105,674 28.76%
Net
Total Equity 367,482
Net Sales 105,674 235.27
Fixed Assets- 44,917
Net
Net Sales 105,674 6.37%
Average Total 1,658,932
Assets
Six-month 12.56% 234% 7.19%
ending 2019

30 | P a g e
Appendix 4: PROFITABILITY RATIOS

Amount NET RETURN ON RETUR NET

(in PROFIT INVESTMENT N ON INTEREST
millions MARGIN EQUITY MARGIN
of pesos)
NET PROFIT 4,252 4.02%
AFTER TAXES
NET SALES 105,674
NET PROFIT 4,252 0.26%
AFTER TAXES
AVERAGE TOTAL 1,658,932
ASSETS
NET PROFIT 4,252 2.27%
AFTER TAXES
AVEARGE 187,312
SHAREHOLDERS
EQUITY
NET INTEREST 66,395 4.36%
INCOME
AVERAGE 1,522,821
INTEREST
EARNING
Six-month Ending 18.49% 1.33% 12% 3.99%
2019

31 | P a g e