This is where BDO Unibank's surprise boost in 2012 earnings came from

It's from the lower-than-expected loan-loss provision of PHP4.9b.

According to Maybank Kim Eng, BDO Unibank Inc’s 2012 net income grew a higher-than-expected 36% to PHP14.3b, beating management guidance of PHP12.5b.

It also exceeded their forecast of PHP13.4b and market consensus estimate of PHP13b. Earnings jumped 30% YoY in 4Q12 but was lower 20% QoQ to PHP3.8b.

Here's more from Maybank Kim Eng:

Trading gains more than doubled to PHP8.2b in 2012. It was smaller in 4Q12 at about PHP790m, but still higher 67% YoY. Total non-interest earnings reportedly increased 18% to PHP24.6b in 2012, implying a 2% rise in 4Q12.

Net interest income rose 7% to PHP36.2b in 2012 as growth in 4Q12 of 15.8% accelerated from 4.4% in 9M12. This can be attributed to a 15% expansion in gross customer loans and better funding mix. In all, gross revenue increased 11% to PHP60.8b, generally in line with our forecast.

Operating costs grew at the same 10% pace as in 9M12 to reach PHP40b in 2012. Cost-to-income ratio improved to 65.7% from 66.4% in 2011. The surprise boost in earnings came mainly from lower-than-expected loan-loss provision of PHP4.9b, down 20% on better asset quality.

Gross NPL ratio fell to 2.8% in 2012 from 3.4% in 2011, suggesting NPLs in absolute amount dropped 6% to about PHP21.6b. NPL cover stood at 126%.