ONB loans, deposits up

MANILA, Philippines - The One Network Bank (ONB) has reported similar double-digit growth rate for both loans and deposits end September this year.

Mindanao-based ONB is the largest rural bank in the country, with 81 branches, and 107 automated teller machines (ATMs).

Loan portfolio grew to P8 billion end September, or 39-percent higher than the P5.8-billion level in the same period last year.

ONB president and chief executive officer Alex V. Buenaventura said that among the main reasons for the high double digit loan growth was the One Business Loans.

The business loan portfolio increased by P543 million for a 58-percent growth in loan availments by many businessmen who are attracted to ONB’s competitive loan interest rates and fast accessible service from 81 branches.

The DepEd-APDS Salary Loans increased by 40.67-percent, or from P3.23 billion in the first nine months of 2010 to P4.54 billion in the same period this year.

“The tremendous upsurge was brought about by the regained competitiveness of ONB’s salary loan product vis-à-vis competition. A teacher’s net proceeds from an ONB loan is now much bigger than what they can get in net cash from other participating financial institution (PFIs),” Buenaventura said.

The bank reduced interest rate to 7.5-percent per annum add-on from the previous 12 percent per annum maximum loan amount of P300,000 per teacher from the previous P150,000. However, it will require a longer term of three years from the previous maximum term of only two years term.

However, Buenaventura admitted that its net income suffered in place of loan-loss provisioning, and one-time expenses related to the bank’s consolidation efforts.

Net income fell by 27 percent from P216 million in the first nine months of 2010 to just P157 million in the same period this year.

“The big drop (in earnings) was caused by the P27 million in additional loan-loss provisioning and almost P20 million in unusual expenses booked in September for documentary stamps taxes (DST) and various fees with the Securities and Exchange Commission (SEC) related to registration of the P5.8-billion authorized capital of ONB’s new consolidated bank,” the bank president explained.

The new bank -- One Network Bank Inc. (A Rural Bank) -- is a consolidation of One Network Bank Inc. & Rural Bank of New Corella Inc., which was granted by Bangko Sentral ng Pilipinas (BSP) a certificate to operate effective this September.

Deposit liabilities grew by 12 percent at the end of September 2011 to P9.4-billion versus the P8.4 billion in the same period last year.

Buenaventura said that capital accounts remain strong, as risk-based capital adequacy ratio (CAR) stood at 22 percent, and stockholders’ equity (networth) was valued at P2.17 billion. Total resources were placed at P12.28 billion as of end Q3 2011.

Loan quality in terms of non-performing loans (NPL) ratio improved by 50 percent from the six-percent level in the first nine months of 2010 to three percent end September this year.

Asset quality in terms of non-performing asset (NPA) ratio likewise improved from the four-percent level in end September 2010 to only two percent in the same period this year.

Last year, net earnings were recorded at P278 million while total resources for the first time breached the P10 billion ceiling to P10.6 billion.