Bank of Commerce posts 14.5% hike in net interest income

MANILA, Philippines - Bank of Commerce (BOC) reported a 14.5-percent increase in net interest income for 2008 to P3.1 billion from P2.7 billion in 2007.

In a report to the shareholders last Tuesday, BOC president Raul B. de Mesa said that the increase outpaced the rise in operating expenses which was 7.1 percent higher than 2007 expense levels.

Loans and receivables reached P55.4 billion, up 55.3 percent from previous year levels. Total deposits increased by 27.2 percent to P77.9 billion. The growth in volumes were attributed to the bank’s conscious efforts to strengthen business relationships with identified markets, both for asset expansion and deposit generation, De Mesa said. Total qualifying capital stood at P8.3 billion, with a capital adequacy ratio of 10.7 percent.

“These financial results underscored the bank’s efforts to manage interest margins and contain administrative expenses,” De Mesa said.

Like all businesses, the bank was not spared by the worst global recession in decades as BOC’s 2008 net income declined by 48.79 percent to P263 million primarily due to markdowns on the investments in structured products. “The institution undertook initiatives to strengthen the balance sheet through additional provisions,” De Mesa said.

During the meeting, elected members of the board were: chairman, Antonio O. Cojuangco; president and CEO, Raul B. de Mesa; Ramon O. Cojuangco Jr.; Miguel O. Cojuangco; Jeronimo U. Kilayko; Ferdinand K. Constantino; Amor C. Iliscupidez; Jose L. Camus; Edgardo A. Bautista; Rafael E. Evangelista; William Russell L. Sobrepeña; independent directors, Jose T. Pardo, Raul Ch. Rabe, Francis C. Chua and Roman Felipe S. Reyes.

Also, De Mesa said that the increase in totally qualifying capital is a result of a series of initiatives. This includes securing the approval for the increase in the bank’s authorized capital. This was followed by capital-raising efforts coming from existing shareholders. And recently, the board paved the way for another offering of Tier-2 capital. All these are aimed not only at strengthening the institution’s capital adequacy, but also to deploy key strategic initiatives mapped out for the coming years.

Last year, programs were undertaken to build the distribution infrastructure and subsequently grow the funding base, expand lending and fee-based business, and promote market presence. Alliances were identified and built with rural banks, for which the bank conducted a series of training programs in credit, treasury, and trust activities.

2008 also saw the start of the creation of a cadre of sales officers (SOs) whose primary mandate was to penetrate geographical areas not within the radius of operations of the current branch network and bring in new depositors or clients.