UCPB nets P5.04 billion in 2003

United Coconut Planters Bank (UCPB) posted audited consolidated net income of P5.04 billion in 2003 on account mainly of substantial recoveries from non-performing loans and assets during the year. The bank sold P8 billion of non-performing loans and assets to the Philippine Deposit Insurance Corp. (PDIC) last year resulting in recovery of the loan loss provisions on the assets.

With the strong earnings result, UCPB’s total capital funds rose sharply to P6.67 billion at the end of 2003 from P1.53 billion a year ago. Total assets also increased to P103.77 billion from P101.40 in the previous year.

UCPB president and chief executive officer Jose L. Querubin said that pursuant to the 10-year business plan that has been approved by the PDIC, the bank would focus on improving top line revenues this year while continuing to manage costs and aggressively selling idle assets and non-strategic investments.

"Our key thrusts in 2004 are to build our deposit base, grow our consumer banking business, expand fee revenues from trade and cash management services, and liquefy idle assets and investments not related to our core business," Querubin said.

In March this year, UCPB tapped Joaquin Cunanan & Co./Pricewaterhouse Coopers (JCC/PwC) as financial advisor to explore the possible sale of P12 billion to P15 billion of the bank’s real and other properties owned or acquired (ROPOA) under the Special Purpose Vehicle Law. Last April, the bank successfully auctioned about P170 million of acquired residential and commercial properties.

Querubin said UCPB also plans to sell its equity investment in four coconut oil mills, which own shares of stock of San Miguel Corp. (SMC). The sale could fetch upward of P6 billion for the bank based on current valuation of the investment.

Meanwhile, to build deposits, UCPB is running an incentive program among its employees. The program has generated P12 billion incremental deposits since its launch six months ago. Querubin said the performance of the ongoing campaign puts UCPB on track to achieving its 30 percent deposit growth target for this year.

The aggressive deposit generation drive is intended to support UCPB’s expansion of its middle market and consumer banking business. Querubin said the renewed focus on these segments reflects UCPB’s strategy to play off its strengths in expanding into markets where margins are high and the risk exposures are low.

UCPB has a strong presence in the middle and consumer markets owing to its wide branch network. Including those of its savings bank and rural bank subsidiaries, UCPB has a total of 212 branches. Querubin said expanding relationships with the existing middle market and consumer clients of these branches would drive revenue growth moving forward.

Signs of UCPB’s increased consumer banking activity are already evident. Querubin said that in the first three months of 2004, the bank’s mortgage loan bookings increased 385 percent to P275.8 million from P60.2 million a year ago.

UCPB also plans to leverage on its strong electronic banking capabilities to grow fee-based revenues from corporate, institutional and the retail markets, and expand deposit relationships with these segments. In 2003, the value of customer transactions on the bank’s e-banking channels reached P5 billion, up 61 percent from the previous year’s level.

To sustain the growth, Querubin said that UCPB formed a separate transactional banking division to focus on developing new information technology and Internet-based cash management and trade products that can be made available to customers via the bank’s Internet, phone banking, ATM and over-the-counter delivery channels.