Despite worries about Trump’s tariffs on the local and global economy, BDO Unibank Inc. president and chief executive officer Nestor Tan is confident the bank will remain on solid ground, sustaining business growth through financial strategies and a management mindset already tested by several crises.

“Banks should be able to manage through difficult and easy times. The challenge here is where to find growth,” he said.

According to the bank’s report to the Philippine Stock Exchange, BDO’s net income increased 7 percent to P19.7 billion in the first quarter of this year from P18.5 billion in the same quarter of 2024.

Gross customer loans drove the growth, jumping 12 percent to P3.3 trillion. Loans to individual consumers posted the highest growth, at 17.3 percent.

Moving forward, Tan said consumer loans will continue to grow, although moderately, amid the country’s strong employment rate of more than 95 percent and a lower interest rate.

He projects the Bangko Sentral ng Pilipinas to ease the lending benchmark to 5 percent by year-end from 5.5 percent, driving economic growth under increased economic uncertainty due to Trump’s tariffs.

However, economists warn the public that the tariffs might speed up global inflation and slow investments as exporters pass the trade costs to consumers.

Given the risk, Tan sees consumer loans growing this year at a similar pace to that recorded a year ago, at 13 percent.

“The likely effect of the tariff wars and all these uncertainties is the economy will slow down, but that doesn’t mean it will tank,” Tan said.

Tan also said the bank will likely continue to register some non-performing loans (NPLs) as borrowers navigate the unpredictable economic environment.

The banker explained, “When you have more consumer loans, you’ll have a higher delinquency rate.”

“The problem, though, is if the banks become reckless, they will not be able to get enough return from the NPLs,” Tan continued.

Prepared for the worst

Tan said BDO will likely register the same profit growth level by year-end at 12 percent due to some NPLs and the global economic slowdown brought by Trump’s tariffs.

As business leaders remain unsure of how severe the tariffs’ impact will be, Tan said BDO will remain resilient, as it did during the 1997 Asian Financial Crisis, the 2007 Global Financial Crisis and the Covid-19 pandemic.

“We expect the worst. Those three crises will happen again, but we don’t know what will start it, so we have much higher provisions than our competitors,” he said.

The bank set aside provisions of P3 billion in the first quarter, although this was lower than the P3 billion set aside in the same period last year, as the NPL ratio declined.

However, Tan said BDO is ready to expand loan loss provisions by at least 2 percent to sustain the business.

“NPLs are not a solvency problem because banks have enough capital. It will be an earnings problem, but they will survive,” he said.

“As long as the economic activity is strong, banks will do well,” Tan added.

BDO improved its NPL ratio to 1.77 percent from 1.88 percent year-on-year.