Asiatrust reports lower net loss of P5M

Asiatrust Development Bank, one of the country’s leading thrift and development bank for entrepreneurs and SMEs, reported a lower net loss of P5 million in the first quarter of its fiscal year ending June 2009.

In a statement, the bank said the unaudited loss incurred from July to September 2008 was a contraction from a net loss of P21.4 million in the same period a year earlier.

For the bank’s fiscal year ending June 2008, Asiatrust posted a net income of P125 million.

Asiatrust said loans decreased by P32.71 million in its fiscal first quarter due to conservative lending strategy in the light of the current financial market turmoil.

 “During the same period, other receivables also posted a net decrease amounting to P55.48 million, bulk of which was due to reversal of accrued interest receivable on paid off loans,” it said.

However, real and owned properties acquired (ROPA) showed a net decrease of P128 million mainly due to the sale of investment properties.

The non-performing asset (NPA) ratio stood at 17.78 percent while non-performing loan (NPL) ratio was at 11.22 percent.

Total resources decreased 5.31 percent to P11.56 billion from P12.2 billion in end-June this year.

The drop in resources was mainly due to the decrease in deposit levels by P441.3 million “as the bank continued efforts to rationalize its deposit mix concentrating on lower cost retail deposits to reduce cost of funds, disposal of US dollar-denominated private bonds of P28.69 million, and the sale of investment properties amounting to P88.25 million.”

Interest income amounted toP188.86 million, a decrease of P5.3 million, due to the decrease in volume on interbank loans receivables.

Capital adequacy ratio (CAR) stood at 10.82 percent at the end of September 2008 from a lower 10.25 percent at the end of fiscal year 2008.

The competitive lending environment and the volatile financial market in the early part of this year have caused the thinning of spreads and decline in trading gains for most banks. This was when the subprime debt problem started affecting the financial market system causing ripples that eventually turned into a financial tsunami in October 2008.

Asiatrust president and chief executive officer Dionisio C. Ong reaffirmed the bank’s conservative and singular focus to help entrepreneurs become financially better off by providing relevant solutions to their unique needs, especially in these difficult times. 

“The entrepreneurs are the backbone of our economy and the bank’s small and medium enterprise (SME) banking platform provides practical and simplified solutions that put them in control of their day-to-day business,” he stated.