Bancommerce eyes 50% earnings growth this year

Medium-sized Bank of Commerce is targeting a 50 percent earnings growth to P894 million this year to stay on track of a P2.2-billion income goal by 2009, a top bank official said yesterday.

Last year, Bancommerce recorded a net income of P596 million.

"The bank also recorded a return on equity of 14 percent, which was good enough to rank Bancommerce among the top 10 commercial banks in this category," said Raul B. de Mesa, BanCommerce president and chief executive officer.

Total assets grew from P56.9 billion in 2005 to a record P70 billion last year, while capital funds expanded to P4.4 billion in 2006 from P3.9 billion in 2005.

Total deposits rose to P54.7 billion last year from P42 billion in 2005.

Deposits were among the key drivers that fueled Bancommerce’s record growth aside from a major reduction in bad assets and net loans, which expanded from P22.1 billion in 2005 to P33.7 billion last year.

For this year, the bank wants to dispose of another P400 million in non-performing loans (NPLs) via the special purpose vehicle (SPV) route, and another P1 billion in real and other properties acquired (ROPA).

"We have successfully sold on our own some P1.4 billion worth of ROPAs in the past two years, and we have maintained provisioning of roughly P1.8 billion," De Mesa said in a briefing yesterday.

Bancommerce will also retire 400 million preferred and convertible shares without prejudice to present shareholders.

For 2007, the bank is looking at continued growth anchored mainly on its 112 branches, 68 automated teller machines (ATMs), and 1,300 personnel.

Bancommerce is likewise bullish on the prospects of its overseas investment involving a financial venture with a foreign entity. The bank has invested the equivalent of P25 million in Banco Nacional de Guinea Ecuatorial (Bange), a joint venture among the national government of Equatorial Guinea, several private investors, and Bancommerce. It will answer the financial requirements of the small but oil-rich West African country located north of Cameroon, south and west of Gabon and east of the Atlantic Ocean.

The bank will initially provide treasury operations and cash management services of the different government agencies. It will also serve as a remittance center for more than 1,200 Filipinos working in the foreign oil firms in the country.

"We have a five-year contract to establish, develop and run the bank," Thirty-two officers and staff of the bank already came from BanCommerce," said Arturo E. Manuel Jr., the bank’s executive staff support sector head.