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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 07 Nov 2025- BDO 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 07 Nov 2025- 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 51% large corporates, 24% middle market, and 25% consumer at 2Q25. 41% of the consumer book comprised mortgages, 29% credit cards, 13% auto loans and the remaining personal loans (13%) and others (5%).
Risk & Catalysts
AS OF 07 Nov 2025- Direct 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.
- We anticipate a negative impact to loan and GDP growth from the recent public infrastructure spending corruption scandal, which will slow government spending and private investments for the next couple of quarters. Further BSP rate cuts are likely in order to support growth, which will put downward pressure on the NIM.
- We see few asset quality risks for BDO given a comfortable NPL cover (3Q25: 134%) and build up of the CET1 ratio (3Q25: 14.4%), as well as BDO’s large corporates book (~50% of total loans) and underwriting track record.
- Any rating downgrade of the Philippine sovereign would negatively impact BDO.
Key Metric
AS OF 07 Nov 2025| PHP mn | FY21 | FY22 | FY23 | FY24 | 9M25 |
|---|---|---|---|---|---|
| NIM | 4.05% | 4.14% | 4.37% | 4.35% | 4.29% |
| Reported ROA (Cumulative) | 1.2% | 1.5% | 1.7% | 1.8% | 1.7% |
| Reported ROE (Cumulative) | 10.4% | 13.0% | 15.2% | 15.1% | 14.1% |
| Equity/Assets | 11.7% | 11.3% | 11.5% | 11.8% | 11.9% |
| CET1 Ratio | 13.6% | 13.4% | 13.8% | 14.1% | 14.4% |
| NPL ratio | 2.8% | 2.0% | 1.9% | 1.8% | 1.8% |
| Provisions/Loans | 0.72% | 0.64% | 0.59% | 0.46% | 0.44% |
| PPP ROA | 2.1% | 2.3% | 2.7% | 2.5% | 2.4% |
| Liquidity Coverage Ratio | 145% | 141% | 123% | 132% | 143% |
| Net Stable Funding Ratio | 124% | 124% | 124% | 122% | n/m |
CreditSights View
AS OF 07 Jan 2026BDO Unibank (BDO) is the largest bank in the Philippines by assets and market share, regarded as the country’s most sound financial institution due to its strong fundamentals, diversified businesses, and effective management. Its systemic importance makes it highly likely to receive support from SM Investments (its major shareholder) and the government during stress periods. While direct exposure to US tariffs is minimal, BDO faces risks from slower regional growth and domestic challenges such as the recent infrastructure spending corruption scandal, which may dampen loan and GDP growth. Further BSP rate cuts to stimulate the economy could pressure net interest margins, but asset quality remains robust with a high NPL cover (134%) and CET1 ratio of 14.4%. The bank’s loan portfolio is dominated by large corporates (~51%), supported by a strong underwriting track record. Any downgrade of the Philippine sovereign rating could negatively affect BDO. Its extensive M&A history and largest distribution network reinforce its leadership position in the market.
Recommendation Reviewed: January 07, 2026
Recommendation Changed: January 07, 2026
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