The subsidiary of BDO Unibank Inc. reversed its P39-million net loss last year, days after the biggest bank in the country suffered a 48-percent profit decline in the first nine months of the year.
In a disclosure last Thursday, BDO Leasing and Finance Inc. (BDOLF) said it ended the first nine months of 2020 in the green, booking net income of P135 million on the back of lower expenses.
The listed lender said that it was a reversal from the net loss it posted for the same period in 2019.
In the first three quarters, BDOLF’s total expenses fell by 18 percent to P1.9 billion due to reduced borrowings and lower funding costs.
Gross revenues for the period, meanwhile, slipped by 5 percent to P2.1 billion “on lower interest income following the sale of BDOLF’s assets, covering lease receivables and other assets, to the BDO Unibank Group as part of the restructure of the Group’s leasing business.”
Shares in BDO Unibank fell by 3.26 percent, or P3, to close at P89 each amid the 2.01-percent drop for the main index last Thursday.
According to BDOLF’s quarterly report, its 9-month interest revenues dropped by 24.48 percent to P1.08 billion from P1.51 billion year-on-year.
As of end-September, BDOLF’s assets and stockholder’s equity amounted to P14.29 billion and P5.79 billion, respectively.
It has earmarked P449.7 million for provisions against potential credit and impairment losses.
Earlier this month, BDOLF said it transferred 27.02 percent of its assets to BDO Finance Corp. as part of the restructuring of BDO Unibank’s leasing business.
Under BDO Unibank’s restructuring strategy, it incorporated BDOFC, a privately held company, to handle its lease products and services.
The exact amount of the transaction was not disclosed but BDOLF said it was based on at least the book value or price on arms’ length basis.
The bulk of the assets transferred were mortgage and other receivables, among others.
BDO Unibank reported earlier that its 9-month net income dropped by 48 percent to P16.6 billion year-on-year on the back of higher reserves for credit losses. The provisions reached P23.8 billion in the first nine months.