Bancommerce projects P320-M income for 2002

The Bank of Commerce is projecting a net income of P320 million for 2002 after registering a book loss of P145.79 million last year. In 2000, the bank registered a net income of P21.44-million.

For the first three months this year, the company posted a net income of P66 million.

Bancommerce president and chief executive officer Raul B. de Mesa said projected earnings will come from various strategic changes such as expansion in business, and increase in technological capabilities.

After the acquisition of Traders Royal Bank and Panasia Banking Corp., the bank’s branch network grew to 112 and its customer base to 225,000. Funding base grew to P25 billion and it will be increased to over P30 billion this year.

The increased fund source is in support of an aggressive marketing thrust aimed primarily at the middle market.

"We are targeting medium-sized companies whose borrowing needs are from P5 million to P50 million. The entrepreneurs will be the backbone of our growth," De Mesa said in an interview.

While admitting that the medium level market is "a bit more expensive to manage because of sheer number," the yields are better while the risk spread is wider.

"From a risk point of view, you are spreading your risks wider instead of concentrating on a few big ones. The yields are better and knowing the Filipino character of pinagsamahan, this should carry us forward," he added.

At present, 65 percent of the bank’s client base belong to the medium level market while the remaining 35 percent are big corporations. The target is to achieve a 70:30 ratio by the end of the year, De Mesa said.

Bancommerce has a non-performing loans ratio of 28 percent which they hope to reduce to 15 percent by the end of the first half due to work-outs and collections as well as an increase in customer base.

The bank inherited some P5 billion in bad debts from the two banks it acquired recently. Most of its assets, or more than 40-percent, are parked in government bonds and Treasury bills.

The Antonio Cojuangco-controlled commercial banks has 112 branches and 1,200 employees. The bank network will reach a maximum 170 if its plans to acquire First e-Bank push through.