StanChart sees earnings to double this year

The Standard Chartered Bank of the Philippines (SCBP) expects its net income to double this year, after registering a net profit of P56.2 million last year. In 2000, the bank reported a net loss of P376 million.

"We had a real turnaround. We have hit profitability again after being unprofitable after the Asian financial crisis," Annemarie Durbin, SCBP chief executive officer said.

Durbin attributed last year’s turnaround to a 105-percent hike in non-funded income amounting to P1.021 billion.

The oldest foreign bank in the Philippines said it experienced good revenue growth in all business segments including treasury, corporate, and retail particularly in the area of credit cards and personal loans. Likewise, effective cost management resulted in operating cost dropping by nearly two percent.

Loan portfolio grew 18 percent last year, from a growth of 16 percent in 2000. In 1999, loans grew by a measly three percent.

SCBP’s non-performing loans (NPLs) ratio remained at a single digit level 8.8 percent last year, much better than the industry average of over 18 percent.

Savings deposits expanded by 9.7 percent while demand deposits grew by 15.1 percent. Capital base grew to P4.96 billion from P4.5 billion in 2000 and from P3.6 million in 1999.

The bank’s credit card base grew to 200,000 last year for a five-percent share of the local market. Durbin said its card business and personal loans will assume a major role this year in increasing the bank’s profitability.

"Presently, the mix is 50-50 in terms of earnings from corporate and consumer banking. But that will change in the next two years in favor of consumer banking," she explained.

Durbin said they are not interested in joining the bandwagon on mergers and acquisitions. Instead, it is in the market for acquisition of portfolios particularly the credit card market.

"We have a P1.6-billion mortgage portfolio which we are disposing to several players in the financial market," Durbin said. "We are selling the portfolio not because it is not part of our strategy. We just can not create value in markets which are not part of our expertise or focus."

Through a strategic, SCBP will help manage the disposal of various investment portfolios. They are also open to "outsourcing" businesses for their existing client base which are not within their strategic focus.

"We can provide services and earn commissions from that form of business. The bank should be focusing on things that create economic value."