Banco de Oro expects to meet income goal of P2.5B

Banco de Oro Universal Bank, owned and managed by retail tycoon Henry Sy, has expressed optimism of meeting its P2.4-billion to P2.5-billion net income target for this year.

"We have not revised our targets. We hope we will meet it," BDO president Nestor Tan said yesterday, when asked how the bank’s operations are being affected by the current economic condition.

Tan anchored his optimism on the continuing strong consumer and commercial lending businesses of the bank.

"There are a lot of promising results from the business," he said.

Tan said they are also intensifying their marketing efforts through the launch of various products.

Yesterday, the bank launched the BDO International ATM Card, the first MasterCard Electronic ATM card in the country. It is the only ATM card that can access all Cirrus ATMs and MasterCard Electronic/Maestro POS worldwide.

In the first half of the year, BDO posted a net income of P1.1 billion to P1.2 billion. The 2005 income target, on the other hand, represents a 20-percent growth over P2-billion income posted in 2004.

At present, the bank’s non-performing loans stood at six percent or a gross of P4.3 billion, of which in excess of 80 percent were covered by a loan loss provision.

The bank executive also expressed optimism that they would be able to resolve the issue with the Social Security System (SSS) on the Equitable PCI Bank shares.

"We hope the Supreme Court will decide on this issue," he said.

But Tan said they would also consider looking into the possibility of buying the shares of Government Security Insurance System (GSIS) in EPCIB. "We are interested in consolidating our stake in Equitable PCI Bank. We will look into that if the price is fair," he said.

According to Tan, they need to finish the transaction with EPCIB before venturing into another expansion plan.

"Not at the moment," Tan said, when asked if they see the need to buy another bank to increase their market share. "It will make sense if we first resolve our shareholding issue in EPCIB. We need to protect our investment first," he said.

He said they are also comfortable with their size. "In every organization, there is a certain comfort level or size that you can handle. With the purchase of 66 branches of UOB (United Overseas Bank) and part of Equitable, we believe these are enough to handle at the moment," he said.

Tan, however, said that they are still awaiting the Bangko Sentral ng Pilipinas (BSP) approval to operate the UOB branches.

Tan said they expect to complete the series of transfer and consolidation of UOB branches by the end of the first quarter next year.

At present, BDO has 185 branches. As of March 2005, BDO ranks seventh in terms of assets with P197.2 billion.