The AUB also said that the 2006 net earnings target could well grow between a "conservative" P700 to P750 million. This translates to an annualized return on equity (ROE) of 14 percent.
Manuel A. Gomez, AUB executive vice president said that net earnings in the first nine months of the year expanded by an unexpected 70 percent to P519 million.
Net income realized in 2004 was P457 million slightly lower than the P477 million in 2003.
Gomez likewise admitted that they were poised to jump into any opportunity given by the Bangko Sentral ng Pilipinas (BSP) in terms of expansion. The monetary regulator is presently studying the possibility of lifting the moratorium on branch expansion, whether total or geographic.
"If it is not lifted soon, we are prepared to acquire branch licenses," the executive vice president said.
It is prepared to expand to certain areas in Metro Manila, northern Luzon, and southern Philippines.
Meanwhile, total capital base grew to P4.6 billion while its loan portfolio balooned to P13 billion.
Total assets stood at P22.6 billion while deposits registered at P17.5 billion.
That resulted in a capital adequary ratio (CAR) of almost 27 percent or twice over the preferred minimum of 10 percent by the regulators.
Likewise, its non-performing loans (NPLs) remained at a safe P1 billion or a little over eight percent of total loan portfolio. "Our real and other properties owned and acquired (ROPOA) is almost negligible," AUB officials boosted.
With its high capital base versus its low bad asset condition, AUB believes that it would not be affected by adjustments required due to adjustments to the new accounting standards under the IAS (international accounting standards).
"We will not need to make huge adjustments, there are no necessary provisioning, and it will have minimal impact on the bank," Gomez sressed.
Meanwhile, AUB has been making significant headway in earnings from remittances.
"Earnings from remittances accounted for 30 percent of fee-based earnings," Isabelita M. Papa, AUB executive vice president for operations, said.
Papa revealed that AUB has forged several alliances with local banks and non-banking financial institutions in the Middle East, Europe and Asia.
She added that they expect money transfers or remittances to expand annually as the overseas workers market are forecast to grow by an average of 20 percent annually.
Remittances from OFWs utilizing the formal sector (banks and money transfer companies) contributed over $8.6 billion last year, and it is forecast to grow to more than $10 billion this year. Adding the informal sector (padala system), it could balloon to $14 to $15 billion. – Ted Torres