ONB increases income, but retains rural bank status-A A +A
Tuesday, August 21, 2012
HOMEGROWN and rural banking giant One Network Bank (ONB) increased its capital base to a robust P2.77 billion as of end July 2012, exceeding the P2.4 billion minimum capital requisite for commercial banks.
Even as this developed, ONB president Alex Buenaventura said the bank has decided to retain its status as a frontrunner in the rural banking industry amid its obvious capacity to convert to a commercial bank.
From January to July, this year, Buenaventura said ONB also outperformed its own 2011 earnings performance.
The operating net income after tax of P336 million as of end July 2012 already surpassed the P315 million income for the year 2011 and registered a record breaking growth of 93 percent compared to P174 million in the same period last year.
Buenaventura said that this net income level, if annualized, translates to a 41 percent return on average private equity and four percent return on average assets, indicating a powerful core performance for the leading provider of modern quality banking products and services in the countryside.
This upsurge in net income is mainly attributed to the substantial expansion in net loans and receivables which is an increase of around 17 percent or P1.83 billion since the onset of 2012, half of which was recorded in the month of July 2012, or a loan portfolio growth of 70 percent or around P5 billion compared to July 2011.
The P775 million net interest income as of July 2012 accounted for 61 percent of the total operating income while 28 percent or P361 million is composed of fee-based income principally derived from service fees on loans.
This loan expansion was made possible essentially by an increase in both deposits of 40 percent or P14 billion from the P10 billion level in July 2011 and capitalization due to the bank's policy of reinvesting all profits.
As of end July 2012, the bank's pool of depositors already reached a number of 575,000. The bank's total resources grew to P17 billion or a 37 percent increment from last year’s figure of P12.5 billion.
The strong deposit and loans growth is backed up by the bank's intensive branch expansion. Earlier this year, ONB opened its 83rd branch in Pasong Tamo Extension, Makati City as a response to the need of Mindanao clients for a financial highway to the country's central business district.
ONB Makati outlet is the bank's first branch outside of Mindanao and the first branch to open in 2012. Other branches inaugurated in the first quarter of 2012 are its 2nd branch in Butuan City, Balingasag in Misamis Oriental, and Sangali in Zamboanga City.
Sustained growth is foreseen in the light of the recent approval from BSP for five more branches in Iloilo. These branches will complement the existing six offices of Rural Bank of San Enrique in Iloilo soon to be absorbed by ONB once the merger secures approval of banking authorities.
ONB also continues to carry out its inclusive banking formula without investing as much as it does for regular branches through the launch of the ONB Micro Branch, a very accessible micro banking office (MBO) located in the barangay, providing modern financial services to micro-depositors in the area thru its counters, ATMs, POS and internet banking.
For the rest of 2012, ONB is opening five MBOs in the barangays of Davao City, namely: Sasa, Cabantian, Catalunan Grande, Sandawa, and unawan.
ONB is also maintaining its confident outlook for the remainder of 2012 as it moves toward introducing more modern banking products and services through electronic channels and expanding its network of branches, ATMs and POS, even without going commercial.
The bank, powered by its 1,291 employees, currently operates a network of 86 branches and 125 Pera Agad ATMs, with back office support system coming from the recently transferred head office to a modern seven-storey ONB Center in Sasa, Davao City.
Published in the Sun.Star Davao newspaper on August 21, 2012.