Banco de Oro takes different approach in getting rid of NPAs

Banco de Oro Universal Bank (Bdo) has joined hands with several property firms to dispose of its ROPOA (real and other properties owned and acquired) and non-performing loans (NPCs).

BdO president Nestor V. Tan said they are looking to dispose of roughly 25 percent to 30 percent the bank’s of ROPOA or an estimated P1.15 billion to P1.35 billion worth of properties through its joint undertakings with property developers.

BdO’s ROPOA stood at P4.6 billion in 2003 from P5.1 billion in 2002.

"The non-conventional approach to ROPOA disposal has shifted to bigger activity in real estate business. We have formed three joint venture formations with developers while another property-based initiative is an organic one," Tan said,

The first alliance is with Sta. Lucia Realty and Development Corp. in a 127-hectate property in General Trias, Cavite for a residential subdivision.

Jardine Davies has also joined hands with BdO in developing several housing properties in Metro Manila, while Prime East will take care of several residential/properties in Antipolo.

Tan said that the bank took a segmented and homogenous approach by "breaking it down" and looking at the potential development of the soared deals.

Taking the main responsibility of ensuring the development and the profitability of the joint ventures is BDO Realty Corp.

Earlier, Union Bank of the Philippines also took the same approach by forming joint ventures with property developers to turn its ROPOAs into profitable ventures.

Unionbank of the Philippines (Unionbank) is forging joint venture agreements with three property developers in its bid to liquidate its bad assets.

The properties were estimated to be worth roughly P1.2 billion and these are located in Metro Manila and other areas outside of Metro Manila.