i-Bank eyes IPO, Tier 2

After seven months of outstanding performance so far this year, the International Exchange Bank (i-Bank) remains on track for a major capital build-up of between P3 to P4 billion next year.

That would be achieved through an initial public offering (IPO) and possibly an application for Tier 2.

"We would like to gain between 10 to 20 percent of our authorized capital base of P5 billion from the IPO," Ramon Y. Sy, president and chief executive officer said, during the formal launching recently of its iDeal ATM card.

Sy revealed that they originally wanted to go public this year but the stock market had been performing sluggishly by the end of 2002. Lately, it has however been steadily moving upwards.

The capital build-up will allow i-Bank to undertake its aggressive expansion program that would increase its branch network, expand its loan portfolio, and increase reserves for a possible acquisition.

It presently has 72 branches nationwide with continued negotiations for an additional 10 by end 2003.

In the first three months of the year, i-Bank registered a 39.7-percent drop in net income from P156 million in January to March 2002 to P94 million in the same period this year. This was due mainly to lower results in trading gains much like the rest of the commercial banking sector and slightly lower earnings from fee-based income.

But by end July (first seven months of the year), its net income hit P277 million, which is practically equivalent to its original full year target. It has recently been adjusted to between P350 to P400 million.

The extraordinary growth realized in that period was driven by gains from security trading and other capital raising activities.

"There is a good chance of surpassing the 2002 net income performance," Antonio C. Moncupa Jr., i-Bank executive vice president and chief financial officer said. Net earnings last year reached P352 million and P303.5 million in 2001.

The country’s banking system’s bottom line figures last year were buoyed by investments in government securities (GS) supplied by government’s craving for borrowings to finance the country’s large fiscal deficit. Trading gains grew much faster in a five-year period versus fee-based or trust earnings.

From P10.8-billion trading income in 1998, the industry saw gains expanding by 85 percent to P20 billion the succeeding year, but slipped somewhat to P12.7 billion in 2000. It zoomed anew to P18.7 billion in 2001 and broke the sound barrier to P33.8 billion or growing by an outstanding 81 percent. – TPT