BDO Unibank (BDOPM)
Philippines / Banking
Active
Issuer Summary
BDO Unibank is a private universal bank with the largest deposit and lending franchise in the Philippines, and its issuer credit is supported by a strong deposit base, earnings power, and low NPL ratio. At the same time, loan growth from 2025 to 1Q 2026 has been rapid, and higher provisions, lower CET1, and declining liquidity ratios through end-2025 mean it is too early to conclude that the credit is on a clear improvement path. LCR/NSFR for 1Q 2026 are unconfirmed, so the liquidity assessment for that quarter remains a provisional judgment based on deposit growth and the loan-to-deposit ratio. Senior credit is within the scope of analysis as an investment-grade bank credit, but for foreign-currency bond investment, investors must continue to verify the Philippine sovereign, individual bond terms, issuing branch, treatment under resolution, quality of loan growth, and capital and liquidity buffers.
BDO’s current credit strength can be assessed as an investment-grade bank issuer credit supported by the largest deposit and lending franchise in the Philippines, good profitability, a low NPL ratio, and capital and liquidity above regulatory levels as of end-2025. The credit direction is broadly stable in the short term, but not yet clearly improving, given rapid loan growth, the increase in provisions in 1Q 2026, the decline in CET1, and the decline in LCR/NSFR through end-2025. LCR/NSFR for 1Q 2026 had not been confirmed, so the liquidity assessment for that quarter remains a provisional judgment based on deposit growth and the loan-to-deposit ratio. The probability of rapid credit deterioration is not high at present, given the deposit base, earnings power, and NPL coverage, but the view would need to be reassessed if credit costs, capital, and the sovereign outlook deteriorate at the same time.
The basis for this credit view is BDO’s overwhelming presence in the domestic banking system. It ranks first in BSP statistics for total assets and net loans, and its own disclosures describe it as the largest in deposits, loans, AUM, capital, and branch network. In bank credit, deposit stability is most important. BDO had PHP4.43tn of deposits at end-March 2026, supporting loans and other receivables, net, of PHP3.79tn. Because its domestic deposit franchise is strong, it is not a bank that would immediately face funding pressure if market funding conditions deteriorate.
At the same time, it would be risky to treat BDO as an unconditionally strong bank. Loan growth from 2025 to 1Q 2026 was rapid, the CET1 ratio declined from 13.8% to 13.3%, and end-2025 LCR/NSFR also fell from the prior year-end. The NPL ratio is stable at 1.68%, but NPL ratios are prone to lag during loan growth phases. Although the 1Q 2026 increase in provisions is described as precautionary, investors should verify over the next several quarters whether it is prudent front-loaded provisioning or an early sign of rising credit costs.
Issuer Reports
Current public reports for this issuer.