BankCom sees Q3 net income rising by 87%

SAN MIGUEL Corp.-led Bank of Commerce’s (BankCom) net income rose by 87% year on year to P793.38 million in the third quarter amid higher revenues.

This brought its net profit for the first nine months to P2.21 billion, up 10% from P2.01 billion in the same period a year ago on the back of growth in its core businesses, BankCom said in a disclosure to the stock exchange on Thursday.

This translated to a return on average assets of 1.26% and a return on average equity of 9.27%.

“The increase was driven by growth in its core business, mainly net interest income, alongside increase in fee income. Core business growth mainly came from expansion in corporate loans and program lending primarily to SMC ecosystem clients,” it said in a disclosure to the stock exchange on Thursday.

The bank’s financial statement was unavailable as of press time.

BankCom’s net interest income grew by 5% year on year to P2.23 billion in the third quarter. In the first nine months, net interest income increased by 11% to P6.76 billion amid the “expansion in earning assets, primarily from corporate and consumer loans as well as financial assets at fair value,” it said.

Net interest margin stood at 4.48% at end-September from the 4.28% at end-December 2023. The improvement came amid faster growth in revenues from earning assets compared to  its interest-bearing liabilities, it said.

Meanwhile, BankCom’s non-interest income surged by 83% to P581.13 million in the third quarter. In the nine months ended September, other operating income went up by 5% year on year to P1.28 billion amid a 12% increase in service charges, fees and commissions.

“The increase is attributable to a 59% surge in underwriting fees amounting to P143.27 million, representing 11% of total other income. The bank also saw increases in trust, credit card, and trade finance fees. Moreover, trading gains posted a recovery totaling P134.75 million from last year’s loss amounting to P0.47 million,” BankCom said.

Operating expenses excluding provisions went up by 7% to P1.7 billion in the third quarter and by 15% to P4.96 billion in the January-September period.

“The expansion in operating expenses was driven mainly by the bank’s continued investment in human capital and technology as well as a higher volume of transactions,” it said.

“The bank’s strategy of improving its revenue streams and prudent spending resulted in a cost-to-income ratio of 62%,” it added.

BankCom’s total loans and receivables climbed by 15% to P125.95 billion, driven by growth in all its lending segments.

Its gross nonperforming loan (NPL) ratio stood at 1.67% at end-September from 1.54% at end-2023, while its net NPL ratio was at 0.48% from 0.44% in the same period.

On the funding side, total deposits inched up by 1% year on year to P188.56 billion. This consisted of primarily current account savings accounts (P164.39 billion), followed by time deposits (P19.14 billion) and long-term negotiable certificates of deposit (P5.03 billion).

This resulted in a loan-to-deposit ratio of 70%.

BankCom’s assets stood at P235.05 billion at end-September, while its capital funds stood at P32.76 billion.

Its capital adequacy ratio was at 18.3%, still above the 10% regulatory minimum.

The bank had a network of 140 branches and 267 automated teller machines as of Sept. 30.

BankCom’s shares closed unchanged at P7.89 apiece on Thursday. — L.M.J.C. Jocson