MANILA, Philippines – United Coconut Planters Bank (UCPB) has remained upbeat in terms of earnings growth this year amid continued efforts to raise capital to meet Basel III requirements by end-2018.
UCPB has been allowed by the Bangko Sentral ng Pilipinas (BSP) to raise its capital based on the Basel III capital framework, which demands among others, of a capital adequacy ratio of 10-percent.
UCPB senior vice president and corporate secretary Ildefonso Jim Jimenez said the bank is confident on positive earnings in 2015 and 2016.
“We are finalizing the business plan for 2016, including realistic income targets,” Jimenez said in a briefing yesterday.
In the first nine months of 2015, UCPB’s net income grew nine percent to P1.99 billion but expectations are that full year earnings would amount to P2.7 billion.
For the whole of 2014, consolidated net income fell to P3.14 billion, down 11 percent from P3.54 billion in 2013.
As in the case of most domestic commercial banks, trading gains weighed heavily on earnings.
In the first nine months, consumer loans rose 30 percent to P39 billion while deposits increased slightly to P217 billion.
Jimenez remained confident 2016 would result in better returns although he said long term prospects would have been rosier if the bank were placed anew on the auction block.
The sale of UCPB was brought to a halt when the Supreme Court issued a temporary restraining order (TRO) on the implementation of Executive Order (EO) 179 and 180. The executive orders were designed to set into motion the privatization and re-conveyance to the government of about P74.3 billion in coco levy funds.
Thus the sale of the bank was stopped along with its ability to raise substantial funds to raise capital to Basel III levels.
Jimenez said a team had been looking at all possible legal options on how to raise funds and overcome the limitations of the TRO.
The likelihood of the TRO being lifted remains bleak, and with the inevitable change in national leadership, bank officials believe it would take at least another year before UCPB issues are addressed.
Prior to the TRO, government, through the Privatization and Management Officer, received 12 letters of intent from domestic and foreign banks.
The minimum bid price stood at P15 billion, but the ideal amount is P37 billion taking into consideration Basel III requirements, among others.