One Network Bank (ONB), the biggest and widest spread rural bank in Mindanao, has reported total resources in 2008 amounting to P8.75 billion, up by 35 percent from the P6.49 billion reported end 2007.
Net earnings expanded to P242 million last year, up by five percent from the P231 million for the whole of 2007.
ONB president Alex V. Buenaventura explained that net income after tax grew by a mere five percent due to the lower interest ceiling in salary loans for teachers.
“The lower interest rate ceiling of 12-percent add-on rate that took effect in mid-2008 as imposed by the new memorandum of agreement with the Department of Education (DepEd) on the Automatic Payroll Deduction System (APDS) salary loans to teachers. Note that this lower yield covers a big volume of P2.63 Billion as of end 2008,” Buenaventura added.
Likewise, additional aggregate booking for loan loss provisioning of P74 million came from operating income.
Total loan portfolio increased by a whopping 31 percent, or from P4.6 billion in 2007 to P5.9 billion in 2008.
This high loan growth was principally accounted for by DepEd-APDS Salary Loans which increased by 25 percent to hit P2.63 billion as of end 2008 from P2.10 billion in 2007.
“Next major contributor to loan portfolio growth is One Banana Program loans to cavendish banana small farmer growers which grew by 19 percent from only P477 million in 2007 to P569 million last year,” the ONB president added.
Deposit expanded by 29 percent to P6 billion last year from P4.67 billion in 2007
Buenaventura said that deposit funds were able to fund 98 percent of loan portfolio (loan to deposit intermediation ratio), making ONB well leveraged while staying self-reliant in terms of funding loans with cheaper own funds versus the alternative of borrowings, which are much more costly.
“Seventy-one percent of the P6 billion deposit represent cash accounts, savings accounts (CASA) deposits which are low cost funds versus only 29 percent in high-cost time deposits,” Buenaventura added.
Total number of branches all located in Mindanao expanded to 72 and 76 units of automated teller machine (ATM). ‘This makes ONB the widest banking network in Mindanao,” he said.
Non-performing assets (NPAs) remained negligible at three percent, and four percent for its non-performing loans (NPLs).
Risk-based capital adequacy ratio (CAR) stood at a healthy 19 percent, stronger than the 10-percent required by the Bangko Sentral ng Pilipinas (BSP) and the eight percent of the Bank for International Settlement (BIS).
Stockholders’ equity (networth) grew by 21 percent to P1.347 billion or 21 percent increase over P1.117 billion end 2007.
“This big growth of 21 percent is due to the 100-percent stock dividend or plow back policy of ONB,” Buenaventura added.