BdO income up 30% in H1

Banco de Oro Universal Bank recorded an unaudited net income of P654.9 million covering the first six months of 2003, or 30 percent better than the P503 million achieved in the same period last year.

The bank attributes the exceptional growth to marked increases in net interest income and the continued strong performance from fee-based activities.

Net interest income was at P1.65 billion, up P620 million or 60 percent from the year-ago levels.

Operating expenses totaled P2.17 billion, or higher by 75 percent compared to June 2002.

The growth in operating expenses is due to higher operating volumes, expenses related to the integration and operations of the additional branches acquired from First e-bank, provisions for expenses and increased taxes. The higher taxes were brought about by the implementation of the 10-percent Expanded Value Added Tax (VAT) on financial institutions.

BdO, the commercial bank of the SM Group, also made provisions for loan loses of P463.4 million, despite the level of non-performing loans (NPLs) at P4.96 billion. The NPL ratio remains one of the lowest in the industry at 7.46 percent compared to the industry average of 15.41 percent as of May this year.

Total resources stood at P127 billion for an increase of P6.1 billion or five percent from Dec. 31, 2002. Compared to June 2002, resources were higher by P42.7 billion or 51 percent.

Deposits declined slightly to P92.04 billion or by P530 million, as it relied more on borrowings during the period. However, this deposit level still represents an improvement of P31.25 billion, or 51 percent over the comparable period last year.

BdO’s net loans expanded to P53.9 billion, a growth of P1.37 billion or three percent from December 2002 levels. This figure already reflects the reclassification of loans to BSP from loans and discounts to interbank loans receivable.

Without such reclassification, loan growth would have been eight percent during the first semester. Capital funds likewise increased from P13.62 billion end 2002 to P14.05 billion. "Primarily from retained earnings," it said in a statement.

Recently, it acquired the high-end financial institution Banco Santander Philippines Inc. (BSPI) for P2.56 billion. BSPI is the local commercial bank subsidiary of foreign banker, Banco Santander Central Hispano SA (BSCH).

The acquisition gives Banco de Oro "a foothold in the high net worth individuals market, as well as expand its consumer and private banking market base."

BSPI is a domestic commercial bank controlled by BSCH and is focused on providing the banking needs of high net worth individuals. BSPI is an extremely well-capitalized entity, with a strong balance sheet and high asset quality. As of June 2003, it had P5.2 billion in assets and a non-performing loan (NPL) ratio of zero percent.

"The market of high net worth individuals as well as private banking business, is a niche that BSPI had successfully developed over the years," BdO said in a statement.