BankCom posts higher net earnings in 2023

BANK of Commerce (BankCom) saw its net income rise by 55.67% last year amid higher revenues.

The San Miguel Corp. affiliate recorded a net profit of P2.802 billion in 2023, up from the P1.8 billion posted in the prior year, its financial statement showed. The lender noted this was its highest annual net income since 2008.

In the fourth quarter alone, BankCom’s net earnings more than doubled to P791.07 million from P311.58 million a year prior on higher revenues from its lending business, investment securities and fees from investment banking group deals.

The bank’s full-year performance translated to a return on equity and a return on assets of 9.52% and 1.25%, respectively.

BankCom’s net interest income rose by 24.16% to P8.3 billion from P6.682 billion on the back of higher earnings from loans and investment securities amid elevated yields.

Its net interest margin was at 4.28%, up from 3.73%.

BankCom’s gross revenues grew by 22.9% to P9.98 billion from P8.12 billion in 2022 on the back of higher service charges, fees, and commissions, and trading gains.

“These are on account of investment banking deals in 2023, which delivered substantial fees for the bank; the recovery of its trading and investment securities business, and a rise in gains coming from the foreclosure, and sale of properties and equipment and foreclosed assets,” BankCom said.

Other income stood at P1.68 billion, 17% higher than P1.43 billion a year prior.

Meanwhile, operating expenses increased by 10.41% to P6.24 billion in 2023 from P5.65 billion in 2022.

This brought its cost-to-income ratio to 0.62% last year, down from 0.68% in 2022.

The bank’s total loans and receivables went up by 4.26% to P109.57 billion from P105.09 billion, driven by corporate loans.

Its nonperforming loan (NPL) ratio stood at 1.54%, down from 2.10% a year prior. Meanwhile, NPL cover was at 93.21%, up from 89.05%.

The bank set aside provisions of P78.84 million in 2023, down 52.56% from P166.21 million in the previous year.

On the funding side, total deposits rose by 5.47% to P185.91 billion in 2023, driven by a 7% increase in current and savings account or CASA deposits to P164.24 billion.

The lender’s loan-to-deposit ratio was steady at 70%.

BankCom’s assets increased by 6.51% to P231.67 billion at end-2023.

Total capital rose by 10.06% to P30.85 billion. Its capital adequacy ratio and common equity Tier 1 ratio stood at 19.88% and 19.09%, respectively.

BankCom’s shares went down by 27 centavos or 4.16% to close at P6.22 apiece on Tuesday. — A.M.C. Sy