PBCom eyes modest 10% growth

The Philippine Bank of Communications (PBCom) is waiting for the passage of a legislation giving incentives for the establishment of the asset management companies.

"Let us look at the rules of the game first," Isidro C. Alcantara Jr., PBCom president and chief executive officer said. He, however, refused to state categorically the extent of the bank’s non-performing loans(NPLs) and non-performing assets (NPAs).

Industry sources speculated that it should be hovering over the 2001 industry average of 18 percent.

Alcantara admitted that the bank was inclined to enter into a joint venture with other entities in rationalizing its NPAs rather than invite an AMC to acquire its entire bad assets.

"We are looking at a tie-up with a reputable developer for example to properly restructure our mortgage banking strategy. Who knows we could put a portfolio just by doing that," the bank official added. "We can manage."

Meanwhile, the bank is looking at a deposit growth of from 10 to 15 percent after it registered a 34-percent growth from the P22.6 billion in 2000 to P30.3 billion recorded last year.

It is also looking to expand its branch network from the present 64 branches to another 30 mostly in Metro Manila. Of the total branches already in operation, 35 are located outside of Metro Manila." The consumer banking market is still strongest in Metro Manila."

Within the same period, PBCom expects to be fully automated to compliment its modest growth targets for the year, which does not include acquiring an expanded commercial banking license. "There is no need to get an EKB license without present market base," Alcantara added.

The bank recorded its second consecutive positive net earnings after a net loss of P2.46 million in 1999. From a modest P155-million net income in 2000, the bank reported an increase of 53.54 percent to P2388 million although its loan portfolio growth remained flat based on its audited financial statement.

Gross income rose to P3.685 billion, or a 12.80-percent growth from P3.267 billion the year before.

"We registered extraordinary growth due among others from the sale of assets, internal restructuring, cash earnings from treasury operations, positive earnings from foreclosed properties and bad loans."

Income from treasury operations grew from P8-million in 2000 to whooping P314 million last year while earnings from interest income grew to P1.003 billion last year.

Total reserves in 2001 reached P3.3 billion and the bank’s capitalization rose to P6.3 billion from P4.7 billion the year before. Loan loss provisioning grew by over 40 percent to P3.0 billion from nearly P1.5 billion in 2000. The year before that PBCom set aside a P834 million for its back-up reserves for loans.