PBCom posts 80% net income growth

MANILA, Philippines - Philippine Bank of Communications (PBCom) posted a net income of P824 million in the first three quarters of 2012, 80 percent higher than the P457 million registered in the same period last year.

In a disclosure to the Philippine Stock Exchange, PBCom attributed the substantial improvement in profit to better market conditions resulting in higher trading gains.

For the nine-month period, the bank earned P692 million from trading, more than four times than last year’s P121 million.

Total operating expense, however, also increased 10 percent from P1.07 billion in 2011 to P1.17 billion this year.

The increase in operating expenses was mainly due to the introduction of new talent in the management team and additional depreciation of information technology (IT) infrastructure and various hardware upgrades.

But the bank said the increase in expenses was offset by a decrease in provision from credit and impairment losses by 98 percent from P58 million to P1 million in 2012 due to adequate provisioning last year.

The bank’s interest income growth resulted in increased net interest margin by 1.37 percent to P1.03 billion compared with the same period last year.

These results, together with the 71 percent growth in non-interest income due to high trading gains, improved the bank’s net income before tax to P1.04 billion from P641 million last year.

Total capital base of the bank stood at P4.86 billion during the period under review from P3.43 billion level as of end-December 2011, a 42 percent growth due to the P1.15 billion additional deposit for stock subscription from ISM, the Chung and Nubla families, and LFM Properties, and current period’s net income of P824 million.

The bank’s total assets grew by P1.65 billion from P41.42 billion to P43.07 billion as of September 2012. Investments for the year in various operating bank assets amounted to P140 million.

As a result of additional capital infusion, increased deposits intake and borrowed funds, the bank’s lending business grew 23 percent.

On July 2011, the major shareholders of the bank signed an agreement with a group of investors led by ISM Communications Corp. involving the sale of their entire stake in the bank.

The major stockholders, in turn, have committed to reinvest the proceeds from the sale of their respective shares amounting to approximately P2.8 billion in the bank.