BDO reviews 2009 targets

Banco de Oro Unibank Inc. (BDO) will be reviewing its 2009 targets after under- performing in the first nine months of 2008 taking into account the continued impact of the global credit crisis.

BDO president Nestor V. Tan said they expect a slowdown in growth for the banking sector due to the financial turmoil.

“It will be a marked slowdown across most critical businesses of lending, trading and services next year, with trading most likely making the least contributions,” he said.

The bank’s net income in the first nine months of 2008 fell to P1.56 billion or 68 percent lower than the P4.88-billion earnings in the same period in 2007. Its original 2008 income target was placed at P7.4 billion.

With the anticipated slowdown in major economies worldwide, the Philippines is expected to grow by less than half of the robust 7.2-percent expansion recorded in 2007. The government has forecast growth to range between three to four percent this year and between three to 3.7 percent in 2009.

Thus, Tan said lending by banks will experience a slowdown as compared to 2007 and 2008 period but he said BDO expects borrowings to continue in 2009.

Growth will come from the consumer and middle market while funding for the corporate sector depends on the extent of the privatization efforts of the government.

Tan said they would continue to manage their balanced sheet properly to match lending, deposit taking and investments. “Either way, we want to be sure that the bank is protected,” he added.

“If we need more (capital) to support our growth or the economic environment we will do so at the appropriate time, and it will likely be addressed to the domestic market,” the BDO chief executive said.

Meanwhile, the bank is in its final stages of full integration of its 2006 acquisition of Equitable PCI Bank and all its subsidiaries. It likewise absorbed all the thrift savings operations, bringing its total branch network to 700.

BDO still has an excess of 40 to 50 unused branch licenses which it will utilize next year “or when there is a pressing need.”

It has likewise joined the shortlist of buyers for AIG Philam Savings Bank, the thrift bank of the Philippine American Life and General Insurance Co. (Philamlife).

BDO is also one of many interested parties seeking to acquire Philamlife and the rest of its subsidiaries, including its mutual fund and pre-need firms.

BDO has partnered with Generali Asia to bid for Philamlife. BDO already owns 40 percent of Generali Pilipinas, a composite insurance company operating in the Philippines.