BanCommerce seen surpassing 2006 income target

The Bank of Commerce (BanCommerce) is confident of surpassing its 2006 net income target of P370 million. In fact, the bank expects earnings to reach P400 million by yearend.

Initial reports indicate that as of end October, it has already breached the P380-million level.

In 2005, earnings hit a record P422 million from P129.5 million in 2004, and P155 million the year before.

BanCommerce president and chief executive officer Raul B. de Mesa explained that the outstanding 2005 performance was due to extraordinary trading and securities gains which may be difficult to duplicate.

"Nonetheless, this year’s expected profits are well beyond expectations, and a product of our three years restructuring," De Mesa explained.

At the end of October, total deposits ballooned to P52.6 billion, more than P10 billion from the P42 billion end 2005.

"That creates more problems, but there is always a solution. As the economy grows, there will be more investor confidence and subsequently more investments, more borrowings," the bank president said.

In fact, the bank will be introducing new lending products designed for the middle, the small and medium enterprises (SMEs), and the consumer markets.

BanCommerce has 112 branches and 68 automated teller machines (ATMs), one-third of which are offsite. It will soon be introducing cash dispensers to reduce over-the-counter cash transactions of up to P25,000.

"It will also compliment the lower valued transactions of the ATMs," he added.

Meanwhile, BanCommerce’s third largest investment has been made in an overseas venture with a foreign entity.

The bank has invested a little over P25 million in Banco Nacional de Guinea Ecuatorial (Bange), the equivalent of the Philippine National Bank, when it was still under government supervision.

Bange is a joint venture bet-ween the National Government of Equatorial Guinea and several private investors. It will answer the financial requirements of the small but oil-rich West African country located north of Cameroon, south and west of Gabon and West of the Atlantic Ocean.

The bank will initially offer treasury operations and cash management services of the different government agencies. It will also serve as a remittance center for more than 1,200 Filipinos working in the foreign oil firms in the country.

"We have a five-year contract to establish, develop and run the bank. Thirty-two officers and staff of the bank came from BanCommerce," Arturo E. Manuel Jr., BanCommerce executive staff support sector head said.

They will also be involved in the establishment of a centralized credit bureau, a non-life insurance firm, and a clearing house. Deviating from its expertise in the financial sector, the bank will also be involved in the development of the West African state’s biggest first-class hotel.

The bank’s investments in Equitorial Guinea is part of expanded relations between the West African state and the Philippines. In fact, the Philippines formalized these by signing three bilateral agreements.

The first agreement covered economic, cultural, scientific and technical cooperation area. The second accord was on reciprocal promotion and protection of investments, and the third was a memorandum of understanding between the Metropolitan Insurance Co. and the West African state to cooperate in undertaking a comprehensive study to determine the feasibility of establishing a life and non-life insurance industry.