Philippine Veterans Bank net income up 99% in H1

The Philippine Veterans Bank (PVB) has increased by a whooping 98.47 percent its net income in the first semester, or from P63.08 million in the first six months of 2000 to P125.20-million this year.

That keeps the growing commercial bank on track to meet its yearend target net earnings of P250 million. Net income in the whole of 2000 was P197.25 million.

According to bank president and chief executive officer Ricardo A. Balbido Jr., the biggest contributor to their impressive first performance was earnings from acquired assets.

"Disposal of the acquired assets accounted for roughly 50 percent of our earnings," Balbido said. The bank is forming an asset management group that will maximize its more than P1.5-billion worth of acquired assets.

Earnings from these assets grew from P1.294 billion in the first semester of 2000 to P1.5 billion in the same period this year, for a 15.95-percent increase. That was supported by a 36.96-percent growth in earnings from other assets.

Total loans decreased by almost 20 percent from P5.85 billion from January to June 2000 to P4.69 billion in the same period this year. Non-performing loans (NPLs) remained a dangerous 15 percent while non-performing assets (NPAs) were at 10 percent.

Cash dividends declared last year amounted to P260-million while stock dividends declared amounted to P197 million.

Meanwhile, Balbido revealed to The STAR that they are looking at expanding their influence through sister bank, Teachers Bank. Teachers Bank will undertake a slight re-orientation towards microfinancing from its sole market base of teachers.

In fact, they are already holding talks with several rural banks located in the Bicol region with the end in view of acquisition.

The Bangko Sentral ng Pilipinas (BSP) declared two years ago a moratorium on new bank license and new branches as the industry was over-banked.

However, banks wanting to enter the microfinancing scheme will be exempted from the moratorium.

Section 3 of BSP Circular 273 exempts from the general moratorium on establishment of bank branches as long as it is focused on microfinancing in line with the government’s thrust of bringing credit to the low income rural folk.

It further added: "After one year of profitable operations, a microfinance-oriented bank may apply for establishment of a branch but the Monetary Board (of the BSP) may require additional capital to be put for every branch in addition to the minimum capital of the thrift bank/rural bank." – Ted Torres