BankCom H1 profit climbs 13% on lending, investment gains

Insider Spotlight

• Bank of Commerce booked a P2.11-billion first-half net income, up 13 percent year-on-year, as its core banking business strengthened
• Net interest income jumped 19 percent to P6.11 billion, helping lift net interest margin to a record 4.68 percent
• Second-quarter profit rose 16 percent sequentially to P1.13 billion, even as operating expenses increased
  
  
  
  

Bank of Commerce (BankCom) grew its unaudited net income by 13 percent to P2.11 billion in the first half from P1.86 billion a year earlier, driven by stronger lending and investment income and supplemented by foreign-exchange gains.

The San Miguel Corp. affiliate is extracting more earnings from its core banking franchise despite higher spending on personnel, technology and expansion. Return on equity reached 11.56 percent, its highest since its initial public offering, while return on assets hit a record 1.47 percent.

Driving the growth

Net interest income surged 19 percent to P6.11 billion from P5.15 billion, supported by higher average lending and investment securities balances and lower funding costs.

That pushed net interest margin to 4.68 percent, the highest since San Miguel acquired the bank.

Gross revenue rose 14 percent to P6.90 billion. Other income totaled P785.38 million, including P340.69 million in gains related to sales of real and other properties acquired and P109.58 million in client-driven foreign-exchange gains.

Those revenue streams helped offset trading losses stemming from market volatility and Middle East geopolitical tensions.

Strategic investments

Operating expenses excluding provisions climbed 13 percent to P4.05 billion as BankCom invested in personnel, branch-lite units and technology. Compensation increased 13 percent to P1.66 billion, while software amortization jumped 31 percent to P85.82 million.

The bank's cost-to-income ratio stood at 59 percent.

Zoom in

Second-quarter net income increased 14 percent year-on-year and 16 percent quarter-on-quarter to P1.13 billion. Gross revenue reached P3.61 billion, up 18 percent year-on-year and 10 percent from the first quarter.

Balance-sheet check

Loans and receivables stood at P153.56 billion at end-June, while deposits totaled P223.64 billion, 91 percent of which were low-cost current and savings accounts.

Gross nonperforming loans were 1.43 percent of loans, while BankCom's capital adequacy ratio stood at 17.07 percent, comfortably above the 10 percent regulatory minimum. —Vanessa Hidalgo| Ed: Corrie S. Narisma