Bank of Commerce weaves into SMC ecosystem

MANILA, Philippines - San Miguel-led Bank of Commerce (BOC) will increase its working capital this year to P17 billion from just P12.47 billion in 2010.

BOC president and chief executive officer Sergio G. Edeza said that the SMC Group made a commitment to put in capital up to end 2011.

“There is an ongoing capital infusion, with the full year additional reaching P4 billion. That it bring the total to around P17 billion,” Edeza said

The new capital will further firm up its working artery into the San Miguel ecosystem, as well as fuel its aggressive lending, deposit-taking and branch expansion program.

In 2007, the San Miguel Properties Inc. (SMPI) and the SMC Retirement Plan acquired majority stake in BOC for P2 billion. Since then, the bank had been re-oriented towards the San Miguel culture.

“The bank is now ready to move forward, and tackle the San Miguel eco-system,” the former senior vice president and treasury head of San Miguel Corp. said.

BOC is barred or limited by monetary regulations to lend to San Miguel. But it can reach out to SMC subsidiaries such as those in the property, energy, entertainment, beverages, manufacturing, distribution and logistics.

Edeza stressed that the San Miguel eco-system is said to account for six to seven percent of the country’s gross domestic product (GDP) annually.

Then the bank could reach out to those dealing with the San Miguel conglomerate such as dealers and suppliers, often regarded as SMC’s extended family. Ultimately, the bank sees itself reaching the families of the SMC employees and its “extended families.”

“Not to mention all their clients,” the BOC chief executive quipped.

Likewise, BOC, which was established in 1991, is serious about its expansion and distribution network.

“We could expand our branch network several times, or we could opt to develop an electronic banking system, or both,” Edeza said.

Towards the end of the third quarter, the special committee will submit its report on how the commercial bank of the SMC Group would expand its reach.

The bank presently operates 122 branches nationwide and roughly the same number of automated teller machines (ATM).

Bank officials intimated that the unofficial sentiment is that the San Miguel hierarchy wants the bank to double the number of branches in three years, and increase the ATM deployments even faster.

“We are not ahead of the competition with the majors having over 700 branches. But with both the funding muscle and the new technologies, the bank could leapfrog to bring it ahead of the competition or at par,” the former national Treasurer said.

In fact, BOC could establish one ATM in every Petron gasoline station. Petron Corp. was acquired a few years back by the SMC Group.

Edeza said that aside from the standard bank branches, BOC could open electronic centers housing ATMs, computers and other technologies where bank clients could transact business.

In the near term, Bank of Commerce is looking to grow its loan and deposit portfolios by another 20 to 30 percent by end 2011.

“We are banking on the name and reputation of San Miguel to get deposits. That is what we want to capitalize on,” Edeza added.