BDO Leasing initiatives start yielding results

2019 November – BDO Leasing and Finance, Inc. (BDO Leasing) reported better numbers in 3Q19 on the back of measures to restore margins. Gross revenues in the three months ended September 2019 amounted to P720.9 million, led by interest income and discounts which yielded positive growth quarter-on-quarter (QoQ) to P501.7 million, on a loan and lease portfolio of P26.5 billion.


Meanwhile, total expenses for the quarter fell by 3% QoQ to P724.1 million on the 17% drop in interest and financing charges as funding costs normalized with lower interest rates. For the nine-month period, the company reported a net loss of P38.5 million, due to margin compression resulting from the company’s short-term liabilities adjusting faster to higher interest rates vis-à-vis its earning assets, e.g., lease receivables (which carry interest rates fixed for three to five years, customary for lease transactions).


The company earlier this year sold a portion of its lower-yielding portfolio, as well as focused on re-pricing of existing loans and new loan bookings to address margin compression. This resulted in the company’s margins gradually improving and eventually producing positive results.


Moving forward, BDO Leasing hopes to sustain the recovery in margins and growth in earnings on the back of its initiatives, supported by a favorable macroeconomic environment.


BDO Leasing is the leasing and financing entity of BDO Unibank, Inc., the country’s largest bank*. It provides its customers direct leases, real estate leases, sale and leaseback arrangements as well as receivables factoring. It likewise provides operating leases through its wholly owned subsidiary BDO Rental Incorporated. BDO Leasing is among the industry’s dominant players in terms of total assets, capitalization and profitability.


*As of June 30, 2019, BDO Unibank, Inc. ranks as the country’s largest bank in terms of total assets, loans, deposits, and trust funds under management based on published statements of condition.


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