Banco de Oro loses more than a billion in third quarter

MANILA, Philippines - Banco de Oro Unibank Inc. lost more than a billion pesos for the quarter ending September after it set aside funds to cover investments in a US bank that later collapsed. Controlled by Henry Sy Sr, the Philippines' richest person, the lender reported P1.3 billion in losses, "caused primarily by the provisions set aside for the bank's exposure to Lehman Brothers," the company said in a disclosure to the Philippine Stock Exchange (PSE). "The declaration of bankruptcy by Lehman Brothers Holdings Inc. caused turbulence in the global financial markets, resulting in substantial markdowns in banks' securities portfolios and the booking for extraordinary provisions for impaired assets," the company said. For the nine-month period of January to September, BDO also said its net income dropped by 78 percent from P4.88 billion to P1.06 billion. But the bank said its “core business remained on track". Net interest income grew 5 percent to P16.97 billion, mainly coming from loans and low-cost deposits. Gross customer loans expanded 35 percent year-on-year to P364.6 billion on demand from corporate and consumer lending segments. Deposits likewise rose 32 percent year-on-year to P577.06 billion. Service charges and fees, meanwhile, contracted 15 percent to P5.84 billion with the absence of significant one-time advisory fees booked in 2007. “The Bank’s trust banking, transaction banking, remittance, credit card, cash management and bancassurance operations… contributed to the 18-percent increase in Miscellaneous Income to P2.7 billion," BDO said. BDO’s trust business also improved, with assets under management of P319.6 billion, an increase of P67 billion or 23 percent from September last year. Its trading and foreign exchange gains fell 69 percent to P1.13 billion as the effects of the global financial turmoil led to mark-to-market losses on the bank’s investment portfolio. The bank’s total resources stood at P743.49 billion, representing an increase of 23 percent compared to the same period last year. Capital was at P56.02 billion, boosted by a P5 billion preferred share issue in September geared to augment the Bank’s Tier 1 capital and support business expansion. BDO, which currently has a nationwide network of 650 branches and more than 1,200 ATMs, said its capital adequacy ratio stood at 13.7 percent as of end-September. Banco de Oro shares declined 24 percent to P22.50--its one-year low--during Monday's trading at the PSE. - GMANews.TV