Anticipating the consequences of the coronavirus disease 2019 (COVID-19) and the enhanced community quarantine (ECQ) especially to businesses, BDO Unibank, Inc. (BDO) recently shared that it has set aside an additional PHP 20 billion in upfront provisions.
The said amount is an additional to the initial PHP 2.1 billion the bank has set aside in the first quarter of the year.
In line with the expected lapses in business activities, tightness in corporate liquidity, lower consumption levels, and contraction in GDP by 3.4% according to the estimates of the government, BDO has moved to allocate a total of 170bps in anticipated credit costs for the effects of the pandemic.
Despite the additional provisions, BDO’s capital adequacy ratio is expected to remain stable and the Bank intends to continue with its regular dividend declaration.
Also through the additional provisions, BDO expects that its coverage ratio will remain strong and among the highest in the industry.
Currently, BDO is coordinating with borrowing clients to find ways to operate in the best service for the clients amid the current challenges.
The bank also expressed confidence that it will be able to be in a good position and bounce back once the economy stands on its feet again.
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