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Bond: BDOPM 4.375 30
BDO Unibank
- Sector: Financial Services
- Sub Sector: Banks
- Country: Philippines
- Bond: BDOPM 4.375 30
- Indicative Yield-to-Maturity (YTM): 4.26%
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Fundamental View
AS OF 03 Mar 2026BDO Unibank (BDO) is the largest bank in the Philippines in terms of assets & market share.
Given its size and systemic importance, BDO is considered too big to fail and is strongly likely to be supported by its controlling shareholder SM Investments, as well as the Philippine government in times of stress.
BDO is widely viewed as the soundest bank in the country given its strong fundamentals, well-diversified businesses, and good management.
Business Description
AS OF 03 Mar 2026- BDO Unibank was established as Acme Savings Bank in 1968, and was then acquired by SM Investments in 1976. It became a commercial bank in 1994 and a universal bank in 1996.
- BDO was listed in May 2002. SM Investments remains the bank's largest shareholder with a 41% stake.
- BDO has expanded through a series of M&As. Among its key transactions, it merged with Dao Heng Bank Philippines in 2001, Banco Santander Philippines in 2003, UOB Philippines in 2005, Equitable PCI Bank in 2007, GE Money Bank in 2009, Citibank Savings, DB Trust and Real Bank in 2014, One Network Bank in 2015 (the largest rural bank in the Philippines), and RB Pandi's banking business in 2019. It also acquired the insurance business of Generali in the Philippines in 2016.
- BDO has the largest distribution network in the country and is ranked the largest bank in terms of consolidated resources, total assets, loans, deposits and trust funds under management.
- Its loan book was split 49% large corporates, 26% middle market, and 25% consumer at 4Q25. 39% of the consumer book comprised mortgages, 31% credit cards, 13% auto loans and the remaining personal loans (13%) and others (5%).
Risk & Catalysts
AS OF 03 Mar 2026Direct impact from US tariffs is limited given that the Philippines is not a major goods exporter, but there is likely to be some second order effects from a slowdown in regional and global growth.
The recent public infrastructure graft scandal has dampened public infra spending, consumer and business sentiment, and private investment, which will weigh on GDP and corporate loan growth at least through 1H26. A prolonged hit to sentiment would exacerbate these effects and strain asset quality. BSP rate cuts to support growth will pressure the NIM, but this is being mitigated by a loan mix shift towards retail.
We see few asset quality risks for BDO given a comfortable NPL cover and an acceptable CET1 ratio, as well as BDO’s large corporates book (~50% of total loans) and good underwriting track record.
Any rating downgrade of the Philippine sovereign would negatively impact BDO.
Key Metric
AS OF 03 Mar 2026| PHP mn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| NIM | 4.05% | 4.14% | 4.37% | 4.35% | 4.31% |
| Reported ROA (Cumulative) | 1.2% | 1.5% | 1.7% | 1.8% | 1.7% |
| Reported ROE (Cumulative) | 10.4% | 13.0% | 15.2% | 15.1% | 14.4% |
| Equity/Assets | 11.7% | 11.3% | 11.5% | 11.8% | 11.8% |
| CET1 Ratio | 13.6% | 13.4% | 13.8% | 14.1% | 13.8% |
| NPL ratio | 2.8% | 2.0% | 1.9% | 1.8% | 1.7% |
| Provisions/Loans | 0.72% | 0.64% | 0.59% | 0.46% | 0.43% |
| PPP ROA | 2.1% | 2.3% | 2.7% | 2.5% | 2.4% |
| Liquidity Coverage Ratio | 145% | 141% | 123% | 132% | 121% |
| Net Stable Funding Ratio | 124% | 124% | 124% | 122% | 118% |
CreditSights View
AS OF 06 Mar 2026BDO is the largest bank in the Philippines. Management is well-regarded, the business is well-diversified and it is the market leader in many business lines. The NIM has peaked with the turn in policy rates, but non-interest income is close to a third of operating income given good fee generation and overall core profitability is strong. We remain comfortable with BDO given the large corporate book and comfortable NPL cover, as well as underwriting track record, which provide comfort around the recently robust growth in retail loans. Capital is also acceptable with the CET1 ratio at 13.8%. However, we have BDO on Underperform from an RV standpoint.
Recommendation Reviewed: March 06, 2026
Recommendation Changed: January 07, 2026
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