Bank’s income up by 38% in 2011

Monday, February 6, 2012

DAVAO City-based One Network Bank (ONB), the most modern and widest private banking network in Mindanao with 82 branches, posted a record net income of P428 million in 2011, registering a 38 percent increase as compared to the previous year.

With the record income, ONB pushed further its net worth or net capital to P2.5 billion, exceeding the P 2.4-billion minimum capital required of commercial banks.

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Even as this developed, Alex V. Buenaventura, ONB president, said the bank will not be converted to a commercial bank and will retain its status as rural bank.

"ONB will not convert to KB status principally because of the lower three percent legal reserves required by BSP (Bangko Sentral ng Pilipinas) from rural banks as against the 21 percent legal reserves for commercial banks," Buenaventura said.

He said the 72-percent increase in loan portfolio, from P6 billion in 2010 to P10.4 billion by end 2011, propelled the bank's remarkable performance.

Still, the biggest portfolio increase was realized from Mindanao government teachers under the DepEd-APDS Salary Loan Program.

As of end 2011, ONB's exposure to 48,467 DepEd teachers reached P5.9 billion for a whopping 109-percent increase over 2010.

Business loans to small and medium enterprises (SMEs) contributed next highest at 78-percent increase in volume, from only P.8 billion in 2010 to P1.4 billion level by end 2011.

"This upsurge in lending increased ONB's loan intermediation ratio to almost 1:1 (P10.4-billion Loans: P10.5-billion deposits)," Buenaventura said.

The P 10.5-billion Deposit Liabilities as of end 2011 represents an 11 percent increase from the P9.4-billion level in 2010.

Buenaventura said lower cost CA/SA deposits account for 64 percent of total deposits, a significant part of which come from around 360,000 PeraAgad Pinoy ATM cardholders whose opening/maintaining balance of only P100 makes this convenient and affordable product very popular among the small accounts especially in countrysides, where ONB is the only provider of ATM machines.

Total resources as of end 2011 reached P15.7 billion for a big 33-percent increase over the P11.8 billion level in 2010.

With a fleet of 114 PeraAgad ATMs and with the introduction of the new Internet banking service now undergoing pilot testing, Buenaventura said ONB has become the country's most modern rural bank.