Tuesday, 1 September 2009

Philtrust Bank’s first-half profit up 40%

Erik de la Cruz
Business Mirror

PHILIPPINE Trust Co., also known as Philtrust Bank, posted a 40-percent jump in net income for the first half of 2009 largely due to its high-yielding placements with the Bangko Sentral ng Pilipinas (BSP) and investments in government securities.

The bank of newspaper publisher and hotel owner Emilio Yap posted a six-month net income of P587.5 million compared with last year’s P419.7 million.

Net income for the second quarter rose 58 percent to P346.3 million from P219.7 million last year.

While maintaining its conservative policy, the bank said it continued to grow rapidly, with total resources increasing to P77.15 billion as of end-June from P71.46 billion at the end of 2008.

The bank attributed the growth to a 31.83-percent, P5.562-billion increase in “due” from the BSP, arising from what it described as a “more effective management” of reserve deposits and from higher fixed-term deposits placed in the central bank’s special deposit accounts (SDA).

Banks have reported huge gains from interest income from their placements with the SDA, a monetary liquidity-management tool that allows the BSP to mop up excess liquidity in the system in order to keep inflation manageable. “The bank’s higher asset base and correspondingly more efficient utilization of capital generated improved earnings compared to the same period last year,” Philtrust said in notes accompanying its results.

The bank’s interest income for the first half grew 21 percent to P2.6 billion from P2.15 billion last year.

The bank said it had also been aggressive in trading bonds and other securities, resulting in a 63-percent increase in gains from available-for-sale securities and a 31-percent increase in interest on held-to-maturity securities.

Service charges and other operating income surged by 139.7 percent due to higher volume of government bonds and other securities sold or redeemed.

These gains offset the 50-percent decrease in income from foreign-exchange trading, it said.

Interest expense increased by 22.5 percent due to higher level of deposits compared with last year’s level.

The bank’s deposit base expanded 9.5 percent to a record P66.15 billion as of end-June from last year’s level of P60.4 billion.

Its capital-adequacy ratio, which measures capital strength against risk-weighted assets, stood at 33.11 percent as of end-June, well above the minimum regulatory requirement of 10 percent.

Yap was previously looking to expand his banking business by acquiring Philippine Bank of Communications (PBCom) from its Filipino-Chinese owners.

In May, however, Philtrust announced it was no longer interested in acquiring PBCom, which recorded a return on equity of negative 18.9 percent as of end-June.

A controlling interest of 67 percent in PBCom is supposed to be sold to a new investor this year in accordance with the financial-assistance agreement signed in 2004 by the Nubla, Luy and Chung families—the bank’s three major shareholders—with the Philippine Deposit Insurance Corp.

Philtrust ranked 16th-biggest in terms of assets among the country’s 38 regular and expanded commercial banks.

1 comment:

  1. Sounds good to me, I will most likely open a TD account with this bank then...