Allied Bank posts 20% profit growth in 2006

Lucio Tan-owned Allied Banking Corp. expanded its earnings by 20 percent from P1.23 billion in 2005 to P1.48 billion last year, the bank said in a statement.

It added that total resources grew 5.2 percent to P127.5 billion from P121.1 billion in 2005 as deposits went up 10 percent in 2006, or from P98.4 billion in 2005 to P108.5 billion.

Allied Bank ranked ninth overall among the country’s commercial banks in terms of total deposits as of end-2006.

"Key factors for (the positive) performance in 2006 are increased deposits, increased consumer loan portfolio, increased remittance and trade business, and the successful disposal of foreclosed assets through joint public auctions with the Philippine National Bank (PNB) and other referrals," Allied Bank president Reynaldo A. Maclang, said.

At the same time, the bank’s non-performing loans (NPLs) fell from P5.34 billion in 2005 to just P4.8 billion last year.

In 2005, Allied Bank sold P4.3 billion worth of non-performing assets (NPAs) via the special purpose vehicle (SPV) route. Its joint venture partner in the SPV is ADC Resources and Holdings (SPV-AMC) Inc.

Of the total NPAs sold, P1.5 billion are ROPAs (real and other properties acquired) and P2.8 billion in NPLs, mostly unsecured.

Allied Bank is looking to raise Tier 2 capital this year tby about P2 billion.

"The bank has decided to disregard Tier 1 and pursue Tier 2 capital-raising scheme to meet the Basel II requirements effective July 2007," said Fabian A. Pagaduan, Allied Bank’s first vice president for corporate affairs, planning, product development and marketing division.

In 2005, it raised $50 million (roughly P2.8 billion) in Tier 2 capital through private placements.