Bank of Commerce eyes double-digit loan growth

MANILA, Philippines — The banking arm of diversified conglomerate San Miguel Corp. (SMC) is looking at a double-digit growth in loan disbursements as it expects the economic rebound to gain more traction this year.

Bank of Commerce president and CEO Michelangelo Aguilar told stockholders during their annual meeting that the listed bank would continue to build its accrual income to help improve its credit growth.

Aguilar said the bank would also focus on fee income from its trust and trade finance businesses, and foreign exchange flows as well as pursue campaigns to sell and reduce its inventories of foreclosed assets.

Bank of Commerce reported a more than 50 percent jump in net income to hit a seven-year high of P1.2 billion last year despite the challenges brought about by the ongoing global health crisis.

Its core income grew on the back of the six percent increase in net interest income. This was driven by prudent management of interest expenses at P697 million, 41 percent lower than last year.

Likewise, non-interest income amounted to P826 million fueled by the double digit 19 percent increase in service charges and fees and commissions and gains on sale of acquired assets.

The total assets of the bank expanded by 17 percent to P199.7 billion, driven mainly by increased purchase of investment securities. The 15 percent increase in deposits to P172 billion also supported the asset growth.

Aguilar said Bank of Commerce is also looking at launching its first investment banking deals this year.

The bank sees the country’s gross domestic product (GDP) growth ranging between five and seven percent this year as the country emerged form the pandemic-induced recession with a 5.7 percent expansion last year from a contraction of 9.6 percent in 2020.

Bank of Commerce also sees the Bangko Sentral ng Pilipinas (BSP) hiking interest rates to as high as 2.5 percent this year from an all-time low of two percent.

It expects remittances from overseas Filipino workers to recover steadily as global economy further reopens.

“Putting these in the proper context, we have set our minds to overcome the challenges and maximize the opportunities that 2022 presents,” Aguilar said.

SMC through SMC Equivest Corp. invested an additional P5.5 billion into the bank to boost efforts of upgrading from a commercial to universal bank.

Bank of Commerce successfully raised P3.36 billion from an initial public offering. Proceeds from the fund raising activity will be used to finance the bank’s lending activities and capital expenditure requirements in connection with the upgrading of its ATM fleet and its core banking system.