In assigning the rating, PhilRatings considered the bank’s sound funding base, the adequacy of its capital in relation to its asset quality, and market challenges posed by an industry which has become increasingly competitive.
iBank is the country’s 20th largest bank, with assets of P51.9 billion as of end 2004. Its share of the commercial banking sector’s loans and deposits in 2004 stood at 8.3 percent and 9.1 percent, respectively. At present, the bank has 75 branches, 56 of which are located in Metro Manila.
iBank is a relatively young bank, having started commercial operations in September 1995. Given its size, the bank has ably competed in an industry dominated by larger banks with larger assets and wider branch networks.
"To its credit, iBank has managed to hold on to its steady course of prudent, programmed expansion, anchored on its access to low-cost funds and its reinforced prospecting and marketing efforts," Philratings said.
Philratings said iBank’s non-performing assets (NPA) to loans ratio of 23 percent is still slightly higher than that for the commercial bank sector of 20.8 percent. However, iBank’s loan loss reserves to NPA ratio of 42.5 percent in 2004 is better than the 35 percent of the sector.
Philratings noted that iBank’s NPA ratio has been consistently improving, with the level of non-performing loans (NPLs) being reduced since year 2001. iBank has shown strength in its deposit-taking activities, with its deposits to liabilities ratio of 85.4 percent as of end-2004. This is better than the sector’s average of 74.8 percent. As of December 2004, lower-cost savings and demand deposits made up 57 percent of iBank’s total deposits amounting to P39.5 billion.
iBank expects to raise P2 billion to P2.5 billion through a Tier-2 capital – a form of long-term debt – to further strengthen its capital base and prepare it for faster expansion, especially in the event the central bank lifts the moratorium on the issuance of licenses for additional bank branches.