SMC banking arm doubles 9-month profit

MANILA, Philippines — The banking arm of diversified conglomerate San Miguel Corp. (SMC) doubled its earnings from January to September, mainly brought about by higher interest income, an increase in foreign exchange gains and fees and commissions.

The net income of Bank of Commerce surged by  138 percent to P1.49 billion during the nine-month period from a year-ago level of P625.72 million as total revenues grew by 25 percent to P5.82 billion from P4.65 billion amid the sustained uptrends in net interest income, foreign exchange gains and service charges as well as fees and commissions.

“The bank’s strong performance was driven mainly by higher revenues from an expanded portfolio of products and services, including investment banking, following its recent upgrade to universal banking status,” Bank of Commerce said in a statement.

Interest income on loans and receivables improved by 18.9 percent to P3.84 billion resulting mainly from higher volume of corporate loans, while total interest expense jumped by 35.8 percent to P704.14 million due to the higher interest expense on bills payable and other liabilities.

As a result, the bank’s net interest income  grew by 20.8 percent to P4.82 billion in the first nine months   from P3.99 billion a year ago.

Trading and investment securities posted a loss of P37.91 million compared to the P10.57 million loss the previous year.

Service charges, fees and commissions surged by 42.7 percent to P550.59 million from higher fees, trust fee income, and ATM fees while gains on foreclosure, and sale of property and equipment and foreclosed assets rose by 24.6 percent to P287.93 million as a result of higher sale of foreclosed assets.

Miscellaneous income also posted an increase of 1.57 times to P90.75 million compared to P35.38 million the previous year mainly from income on recovery on charged-off asset.

Total expenses, excluding provision for credit and impairment losses rose by 6.7 percent to P3.94 as compensation and fringe benefits increased slightly by 2.8 percent to P1.4 billion.

For the third quarter alone, the profit of Bank of Commerce jumped by 87.2 percent to P601.58 million from P321.35 million in the same quarter last year.

As of end-September, the total capital of Bank of Commerce grew by 17 percent to P27.43 billion from the end-2021 level of P23.36 billion due to the issuance of common shares in the first quarter.

This translated to a capital adequacy ratio of 18.57 percent, well above the minimum requirement set by the Bangko Sentral ng Pilipinas.

San Miguel Properties Inc. holds 31.9 percent of Bank of Commerce, while San Miguel Corp. Retirement Plan owns 30.84 percent. SMC Equivest Corp. holds 100 percent ownership of the bank’s non-voting preferred shares.