Asiatrust Bank seeks strategic partner

Asiatrust Bank, one of only two thrift banks listed at the Philippine Stock Exchange (PSE), is reportedly in the market for a strategic partner to expand its capital base.

At the end its fiscal year 2002 (July 2001 to June 2002), the bank’s total resources stood at P10 billion.

"We are looking for a strategic partner that shares the same development philosophy. And they must have a strong SME (small-and medium enterprise) orientation," Dionisio C. Ong, Asiatrust Bank president said.

Ong cited observations that the Philippine economy always picked up a year before the national elections. The next national elections will be held in 2004.

By next year, Asiatrust is looking to implement a more aggressive SME lending program, requiring it to expand its capital and lending base. In fact, a Tier 2 fund-raising activity is in the drawing board of the development bank.

The bank president admitted that they were looking at P700 million or the maximum ceiling for Tier 2 capital buildup representing 50 percent of its Tier 1 capital of P1.4 billion.

Following the SME and development orientation as basis for its selection of strategic partner, the likely candidates are multi-lateral lending agencies such as the Asian Development Bank (ADB) and the International Finance Corp. (IFC), the investment arm of the World Bank.

The IFC has made investments in the Planters Development Bank, also a thrift bank, and Banco de Oro Universal Bank. On the other hand, the ADB has refrained from making direct investments in financial institutions although it has various program loans for financial and non-financial institutions.

Other probable strategic partners include the United States Agency International for Development (UNAID) and KfW of Germany.

Meanwhile, Asiatrust registered a P4-million net income in the first quarter of fiscal year 2002-2003 (July to September 2002) or an almost hundred percent growth from the P2.37 million recorded in the same period last fiscal year.

Net income for the whole fiscal year 2002 was P35.8-million or 19.33 percent better than the P30-million in the same fiscal period last year.

Ong said that the bank grew by an average eight percent in terms of total assets while it grew by 28-percent in terms of deposits.

Non-performing loans (NPLs) ratio to total loans was 14 percent from the 18 percent it recorded the year before while its capital adequacy ratioin (CAR) stood at 14 percent.