The Market Monitor Minding the Nation's Business
Lito U. Gagni
Banco de Oro (BDO) Unibank breached the trillion-peso mark in its loan base last year registering a huge 31.5-percent surge to P1.2 trillion, as it pursued an aggressive lending strategy that netted low-margin corporate accounts.
As a result, its net interest margin fell from 3.3 percent a year ago to 3.2 percent, but a remarkable fourth-quarter run netting P6.06 billion in profits that include trading gains and fee-based income brightened the income picture.
But its net income for 2014 of P22.8 billion that translates into an earnings per share of P6.31, resulted from the rise in non-interest income in the last quarter of P7.66 billion.
Market analysts, though, see a further rise in BDO’s income this year due to the higher loan base and a vibrant trading environment that had the stock market eclipsing its record run almost every week.
BDO’s available for-sale securities, a key barometer in a bank, as well as trading securities as of end-2014 stood at P221.51 billion.
The bank itself, in its profit guidance, sees earnings of from P4 billion to P5 billion from its trading and forex gains.
Profit guidance churned out by securities analysts show the bank on track to hit P25.8 billion by the end of the year, as its new bank acquisitions such as The Real Bank, City Savings Bank and One Network Bank are not yet expected to contribute much to the bank’s profit picture.
Meanwhile, the purchase by the Henry Sy-led bank of The Real Bank has led to varied speculations on why realty developer Jose L. Acuzar disposed of the bank that he took over in 1994.
Sources said the bank has been under scrutiny for quite a while although this could not be independently confirmed from the Bangko Sentral ng Pilipinas (BSP) as officials are not allowed to talk about individual banks but only the banking system as a whole.
BSP officials also refuse to disclose what sanctions have been imposed on The Real Bank and whether its real-estate exposure had come under close watch due in part to the BSP’s enhanced credit-risk management of the banking system.
Last June, BDO, in a disclosure to the Philippine Stock Exchange said in cryptic wordings that it was acquiring the Acuzar-led bank’s “recorded assets and liabilities.”
Beyond the terse statement, BDO did not disclose other details although usually, a bank’s purchase price is a multiple of its asset base.
Sources said BDO could have coughed up P240 million for the acquisition of the 24 branches of The Real Bank and that could be the “incentive” it got for the purchase of the banking business of Acuzar’s bank.