Thursday, 22 April 2010

Allied Bank profit more than doubled to P1.2B in 2009

Erik de la Cruz
Business Mirror

TYCOON Lucio Tan’s Allied Banking Corp., which may soon be swallowed by Philippine National Bank (PNB), posted a 139-percent increase in net income to P1.2 billion for 2009 on double-digit growth in both interest and noninterest income.

Allied Bank, in its latest annual report—which could be its last in its 13 years of operations—said profit last year was more than double its 2008 bottom line of P501 million.

Net interest income swelled by 24 percent to P6.7 billion.

Noninterest income rose 36 percent, reflecting improved foreign-exchange gains and the turnaround in trading and investment securities from a loss of P458.2 million to a gain of P134.4 million.

The bank ended 2009 with total assets of P188.1 billion, representing a 7.5-percent expansion from a year ago.

Total liabilities, which comprised 87 percent of total assets, grew 5.5 percent to P164 billion, with deposit liabilities up 4 percent to P147.6 billion after the bank’s offer of long-term negotiable certificates of deposit in October raised P3.5 billion.

Last month Allied Bank said it was in talks with a potential buyer of its 28-percent stake in California-based Oceanic Bank, the sale of which will pave the way for its merger with PNB.

The two Philippine banks are looking to merge within this year, with PNB as the surviving entity.

The merger will create the fourth-largest private bank in the Philippines.

PNB was seventh biggest by assets as of end-2009.

Allied Bank was ninth biggest in terms of deposits

PNB and Allied Bank had a combined network of 629 branches as of end-2009, much bigger than Rizal Commercial Banking Corp.’s network of 338 branches, currently the fourth biggest.

Under US banking regulations, Allied Bank must first dispose of its equity interest in Oceanic Bank if it is to merge with PNB.

Oceanic Bank, which was previously estimated to be worth $30 million, has two branches in California and one in Guam.

PNB posted net income of P2.2 billion for 2009, double the previous year’s bottom line, amid strong gains in core businesses and improvement in asset quality and in operating efficiencies.

It ended 2009 with total assets up 3 percent at P284.5 billion.

Aside from increased asset allocation toward loans, it built up other earning assets, including a P2.8-billion equity investment in Allied Commercial Bank in Xiamen, China.

The asset growth of PNB came from the 7-percent expansion in deposit base and 9-percent increase in stockholders’ equity.

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