One Network Bank bullish over loan, deposit growth in 2009

MANILA, Philippines – The positive gains in the first three months of 2009 have reinforced the 2009 full year targets of One Network Bank (ONB), the largest rural bank in Mindanao.

It is looking to grow its loan portfolio to P8 billion by end 2009 from the P5.9 billion in the end of the first quarter of the year.

Deposits are likewise expected to grow from P5.6 billion after three months into 2009 to P7.8 billion by yearend.

It is looking to expand by 19-percent growth in net earnings for 2009, or from P244 million last year to P288 million.

Total resources amounted to P8.416 billion at the start of April this year, up from the P6.49 billion end 2007.

“ONB remains upbeat for the rest of the year 2009 inspite of the global crisis considering that credit demand is and will continue to remain strong for DepEd Salary Loans and One Banana Program growers loans and the market demand for agri products is expected to remain strong in the agri-based economy of Mindanao and this liquid environment will in turn support the deposit generation targets of ONB Branches especially in the countryside,” Alex V. Buenaventura, ONB president, said.

One Banana Program loans go to cavendish banana small farmer growers which grew by 19 percent from only P477 million in 2007 to P569 million last year.

Buenaventura added that another indicator of a resilient Mindanao economy is the sustained growth in total inward foreign remittance volume which reached P79 million in the month of March 2009 as against only P72 million in January and P69 million in February.

“The feared drop in foreign remittances is not being experienced by ONB,” he added.

 It is looking to open five more branches this year to reach an unprecedented 80 branches by yearend. It recently opened three new branches located in Surigao City, Dipolog City and Sindangan, Zamboango del Norte.

Complimenting its bricks-and-mortar expansion, is the expansion of its automated teller machine (ATM) network from 83 at the start of the second quarter of 2009 to 118 by December.

Buenaventura in an earlier interview 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.

“Seventy-one percent of the P6-billion deposit last year represent cash accounts, savings accounts (CASA) deposits which are low cost funds versus only 29 percent in high-cost time deposits,” he said.

Its risk-based capital adequacy ratio still high at 19 percent level, or almost double the 10-percent minimum requirement of the Bangko Sentral ng PIlipinas (BSP).

Stockholders’ equity rose to P1.374 billion, or 17 roughly increase over P1.188 billion of previous year. “Note that steady growth in networth is due to 100 percent stock dividend or plow back policy,” Buenaventura stressed.

Return on private equity (ROE) stood at 27 percent while return on assets (ROA) was registered at 3.23 percent. — Ted Torres