BdO income reaches P2.29B in first 9 months

The consolidated net income of Banco de Oro Universal Bank (BdO) in the first nine months of 2006 has almost equalled the earnings achieved in the whole of 2005.

By the end of September, BdO posted a 23-percent growth in bottomline profits with a consolidated net income of P2.29 billion. Income for the whole of 2005 was P2.54 billion.

In the third quarter alone, net income ballooned to P1.03 billion, or 53 percent higher than the P672 million in the same period last year, and 85 percent higher than the P558 million for the second quarter of 2006.

Despite a generally lower interest rate environment for this year, BdO managed to improve its net interest income by 17 percent owing to a substantial increase in its portfolio of interest earning assets.

Non-interest income for the period grew by 47 percent, or from P2.5 billion in the period in question last year to P3.7 billion on account of an upsurge in trading gain due to a decline in interest rates in the third quarter of this year.

Trust fees and service charges, likewise, increased by 30 percent and eight percent, respectively.

Operating expenses was 33 percent higher from the same period last year primarily owing to expenses related to the consolidation of the credit card subsidiary into the parent bank as well as the integration of the acquired United Overseas Bank of the Philippines (UOBP) branches last year.

With a 228-branch network as of the third quarter of the year, BdO plans to redeploy 23 more branches in strategic business areas in the coming months. It also operates 327 ATMs nationwide.

Total resources stood at P290.4 billion for a 36-percent year-on year growth.

Investment securities increased by 32 percent to P113.7 billion while net loans and other receivables grew by 28 percent to P123.8 billion.

Funding the growth in assets was a 37-percent growth in total deposits to P204.4 billion and a 24-percent increase in total capital owing to the continued profitable operations of the bank.

Return on average equity was computed at 14.03 percent while return on average assets registered at 1.17 percent.

Last year, the commercial bank of the SM group posted an audited net income of P2.54 billion in 2005, or an increase of 29 percent from the P1.97 billion recorded in 2004. In 2003, net profits reached P1.5 billion, after it first broke the P1-billion barrier in 2002 closing at P1.057 billion.

BdO has also been vigorously increasing its capital base not only to meet all the standards under the Basel II regulatory framework set by November 2007. It is also poised to acquired Equitable PCI Bank, presently the third largest commercial bank in terms of resources.

Combined, the SM Group is already the majority stakeholder of EPCIB controlling 59.7-percent equity. Through SM Investment Inc. (SMIC), it acquired the 13.7-percent equity share of the Government Service Insurance System (GSIS) at P92 per share.

A successful takeover of EPCIB will catapult BdO as the second largest commercial bank behind the Metropolitan Bank and Trust Corp. (Metrobank).