Bank of Commerce sees P1.2-B earnings this year; eyes Tier 2 capital, public listing

Unperturbed by the continued fall of the peso and the disruptive May national elections, the Bank of Commerce (Bancommerce) is looking to expand its net earnings (after tax and before provisioning) by 64 percent, or from P730 million in 2003 to P1.2 billion this year.

The commercial bank will also attempt to raise capital this year via the Tier 2 tack. It is also seriously considering launching an initial public offering (IPO) next year.

"The main issue here is raising more working capital, and not lack of it," Raul B. de Mesa, Bancommerce president and chief executive officer said in a press briefing yesterday.

De Mesa said that they were looking at raising between P2 to P4 billion in the capital market where most of the amount would go to new and existing business for revenue generation."

It would also allow Bancommerce to rid itself of most if not all its more than P3-billion worth of non-performing loans (NPLs) or 14 percent of total loan portfolio.

Aside from cleaning up existing or delinquent loans, the capital raised would held complete its branch expansion and modernization. It has 112 operating branches nationwide, and two more will be opened within the first quarter of the year.

Bancommerce will also be relying on earnings from trading gains, and other forms of banking activities. The disposal of bad assets is likewise a major activity.

After infusing a P600-million loan-loss provision last year, its overall provisioning stood at roughly P2.3 billion nearing the one-on-one ideal provisioning level.

De Mesa said loan portfolio is targeted to grow by at least 10 percent from P22 billion while its foreign currency deposit unit (FCDU) to nearly P10 billion.

Last year, net interest income grew to P1.2 billion or a 66-percent increase from the P497 million realized the previous year. Fee-based revenues hit P1 billion or 19 percent better than in 2002.

In the past three years, the Antonio Cojuangco-bannered bank acquired two commercial banks to strengthen its hold among the medium-sized and well-entrenched financial institutions. – TPT