Banco de Oro posts 23%
profit hike in first 9 months

By Honey Madrilejos-Reyes
Reporter

BANCO de Oro Universal Bank, the listed financial arm of the Sy Group, reported Monday a 23-percent increase in net profit from January to September this year to P2.29 billion.
           
In a disclosure to the stock exchange, BDO said the improvement was influenced by the 17-percent upsurge in its net interest income due to the substantial increase in its portfolio of interest earning assets.
           
Noninterest income for the nine-month period also grew by 47 percent from P2.5billion to P3.7 billion as a result of the trading gain due to a decline in interest rates in the third quarter of this year. Trust fees and service charges went up by 30 percent and 8 percent, respectively.
           
Meanwhile, operating expenses was 33-percent higher from the same period last year primarily owing to expenses related to the consolidation of the credit-card subsidiary into the parent bank as well as the integration of the acquired UOBP (United Overseas Bank Philippines) branches.
           
With a 228-branch network as of the third quarter of the year, the bank plans to redeploy 23 more branches in strategic business areas in the coming months. BDO has the advantage of a number of its branches located in SM malls.
           
As of the third quarter, BDO’s total resources stood at P290.4 billion for a 36-percent year-on-year growth. Investment securities increased by 32 percent to P113.7 billion, while net loans and other receivables grew by 28 percent to P123.8 billion.
           
From July to September alone, BDO’s net income was P1.03 billion, 53-percent higher than the P672 million it recorded in the same period last year.
           
BDO is a universal bank, which provides a wide range of corporate, commercial, retail, and investment banking services in the Philippines. These services include traditional loan and deposit products, as well as treasury, private banking, trust, cash management, insurance, remittance and credit-card services.
           
Its strategic focus is on becoming a leading full-service bank in select markets in the Philippines. BDO’s principal markets consist of a select niche in the corporate market, the middle-market banking segment (consisting of mid-size corporations and small- and medium-sized enterprises), and the retail/consumer market. It plans to pursue its growth strategy through selective acquisitions and organic growth.
           
BDO and Equitable PCI Bank (EPCIB), into which BDO parent SM Investments Corp. led a group that bought 52 percent of EPCIB in September, were set to hold a joint briefing at 5 p.m. Monday.
           
A merger of the two banks would create the Philippines’ biggest lender by assets.
           
EPCIB spokesman Paquito Vista before the briefing declined to comment in a telephone interview on whether the two Manila-based lenders would announce their merger. The planned briefing was also announced by SM Investments Corp., Banco de Oro’s parent, through its public relations consultant.
           
SMIC in August offered to buy the two-thirds of EPCIB not controlled by the tycoon. Shareholders agreed to sell 52 percent, raising Sy’s stake to 86 percent, for P34.5 billion payable over two years.
           
BDO shares were unchanged Monday at P44.50. EPCIB were also unchanged at P72.50. Meanwhile, SMIC stock rose a little less than 1 percent to P285. (With Bloomberg)