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Foreign-currency deposit units, or FCDUs, proved less
profitable in 2007, posting net income of $738 million
or 5.1 percent lower than in 2006.
According to the Bangko Sentral ng Pilipinas, the
industry posted simultaneous declines in both net
interest and noninterest income that effectively subdued
the 12-percent or $15-million drop in operating expenses
to $111 million from $126 million.
FCDU net
interest income fell by $32 million to $536 million last
year while noninterest income fell by $20 million. As a
result, FCDU return on assets slid to 3.1 percent from
3.5 percent previously, as assets grew faster than their
collective net income. FCDU assets at end-2007 were 4.6
percent higher—to $24.7 billion from $23.6 percent
previously.
About 95
percent or $23.6 billion of those assets were owned by
the large commercial banks, and the balance of 4.5
percent or $1.1 billion were held by thrift banks, with
deposits forming the bulk or 78 percent totaling $19.3
billion.
The bulk
or $699 million of these profits were generated by the
large commercial and expanded license banks, and 5.4
percent or $39 million were generated by thrift banks.
FCDUs
are key players of the economy, their assets forming the
country’s alternate foreign-exchange reserves. They
usually keep the bulk of their assets in marketable
securities over investments held to maturity.
Net
held-to-maturity investments contracted by 13.4 percent
to $2.5 billion while marketable securities lifted by
the same magnitude to $9.5 billion.
FCDU
loans net of lending to each other grew by 47.5 percent
during the year to $3.9 billion. The biggest borrowers
were manufacturers, which got $1.3 billion worth of
dollar loans last year.
Financial intermediaries also borrowed, showing a total
of $1 billion and the second biggest clients, followed
by utilities with $500 million, and together, the three
sectors accounted for 69 percent of total loans.
FCDUs
incurred nonperforming loans averaging $1.1 percent,
slightly up from 1 percent in 2006. |
