Sterling Bank income target tops P200 million in 2010

MANILA, Philippines - After registering a positive net income for the first time, Sterling Bank of Asia (Sterling Bank) is planning to recoup its two-year loss average in 2010.

“Our wish list includes net income growing by four to five times,” Lamberto R. Villena, Sterling Bank president said in a press briefing yesterday.

In its first year of operation in 2007, Sterling Bank recorded a net loss of P36.3 million and it ballooned to P212 million in 2008.

Last year, the thrift bank got its first taste of positive earnings of P25.6 million. And its forecast for 2010 is at least P200 million.

“We will achieve that by strengthening the bank’s fundamentals and do the basics of banking better,” Villena said, adding that the 2009 performance proved that it was structurally more efficient than in previous years.

This year, the thrift bank is looking to grow its loan portfolio by 30 percent from the P9.1 billion in 2009. Deposits, which stood at P15.8 billion end 2009, are targeted to grow by 15 percent.

Emphasize will be placed on high-cost deposits this year as the level of liquidity in the market remain extremely high. “We can now be selective now that we have achieved high deposit levels,” the bank president said.

In terms of loans, emphasis will be placed on widening the consumer market. From a 50-50 ratio, Sterling Bank would like to move the balance toward 60-percent favoring consumer loans, which includes personal, mortgage and auto.

After acquiring Centennial Savings Bank last year, Sterling Bank is still reviewing its options for another acquisition. Four thrift banks are reportedly in the market looking for a good deal, although negotiations restrict revealing the identities at this point. It is likewise reviewing its option to enter the capital markets to increase its capital base.

The strategic goal of Sterling Bank is to get a commercial banking license (which requires a P2.4 billion capital base). But it is not in a hurry right as it presently has a capital base of a little over P1 billion.