BDO Unibank Inc.'s subsidiary Dominion Holdings Inc., dragged down by higher expenses, has posted a decline in net income during the first nine months.

In a statement issued Thursday, BDO said that Dominion Holdings recorded a net income of P28 million from January to September this year, down from P39.8 million it posted during the same period last year.

The decline was attributed to higher total expenses which climbed to P21.5 million from P13.1 million, mainly due to a tax adjustment from the Bureau of Internal Revenue during a prior period.

This comes as the company said rising interest rates drove the fair value gain on its investments up to P49.5 million, from P45 million in the same period last year.

Policy rates hike

The Bangko Sentral ng Pilipinas' Monetary Board in September hiked policy rates by another 50 basis points as it expects inflation to average 5.6 percent this year, higher than the target range of 2 percent to 4 percent.

Prior to this, it already raised rates by 50 bps in August, .75 bps in an off-schedule hike in July, and 25 bps each in June and May.

Formerly known as BDO Leasing & Finance Inc., Dominion Holdings has shifted its primary purpose from a leasing and financing company to a holding company.

"As an investment holding company, Dominion Holdings Inc. will have more flexibility in pursuing business opportunities which will enhance shareholder value for its shareholders," it said.