Banco de Oro posts 15% net income growth

Banco de Oro Universal Bank (BdO) kept its 2003 net earnings target of P1.3 billion on track after it posted an unaudited net income of P965.1 million in the first nine months of the year.

The income performance was 15 percent better than the P842.1-million profit in the same period last year, the bank said.

The growth in income, BdO said, was primarily due to the increase in its net interest income to P2.78 billion, up 69 percent from year-ago levels.

But the biggest barrier to achieving its full year target, the bank said, is the disposal of its P5.6 billion in bad assets, which includes an undisclosed amount tied to the troubled Manila Electric Corp. (Meralco).

Other sources of income declined by five percent year-on-year to P1.91 billion, although the comparable period last year included a one-time gain from the sale of secondary shares during its initial public offering (IPO) in May 2002. Exclusive of this one-time gain, other income actually grew by 17 percent over the same period last year.

Total resources stood at P134 billion, an 11- percent increase from the end-Dec. 2002 level. Compared to the same month last year, it was higher by P34.5 billion or 35 percent.

Deposits increased to P97.6 billion or by P5.2 billion, while bills payable grew by P4 billion. The deposit level represents an improvement of P24.3 billion, or 33 percent over the comparable period last year.

Operating expenses totaled P3.39 billion and was higher by 72 percent compared to Sept. 2002. The growth in operating expenses was primarily due to expenses related to the integration and operations of the additional branches acquired from First E-bank, and the ongoing consolidation of Banco Santander Phils. Inc. which started last July.

BdO set aside P466.4 million in loan-loss provisions due to the steady level of non-performing loans (NPLs). Its NPL ratio remains one of the lowest in the industry at 7.14 percent compared to the industry average of 15.38 percent as of July 2003.

Net loans expanded to P55.5 billion, a growth of P3 billion from Dec. 2002 and by P7 billion compared to Sept. 2002. Adjusting for the new system of reclassification by the Bangko Sentral ng Pilipinas (BSP) for loans to interbank loans receivable, growth on a comparable basis would have been 12 percent.