ONE Network Bank, Mindanao's leading rural bank, posted a P232 million net income after tax for the year 2009, a seven percent decrease as compared to its P252 million net income in 2008.

One of the reasons that the bank cited for its slump is the minimal growth on the performance of its loan portfolio. For 2009, the bank's loan portfolio only grew by 0.05 percent.

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But other loan portfolios of the bank showed huge growth, including its One Banana Program, which posted a five percent increase or plus P27 million to reach P590 million yearend total.

The bank's One Business Loans, on the other hand, increased by 21 percent or plus P145 million to reach P832 million yearend total.

The increase in other loan portfolios was not enough to cope with the decrease in the bank's DepEd-APDS Salary Loans, which had a 0.5 percent decrease or minus P16 million to go down to P3.071 billion yearend total.

Salary Loans to local government units (LGUs) also decreased by around P128 million.

The bank clarified that the big portfolio decrease in salary loans to local government units was due to "culling" of bad loans due to high Past Due Ratio, leading to the cancellation of credit lines for many LGUs and a general risk aversion attitude among branch managers to lend more to remaining accredited LGUs.

The high ratio of non-performing loans also resulted to lower relative volume of performing loans for which interest can be accrued plus higher provisioning for loan loss reserves charged against present operations.

Last year posted a five percent ration of non-performing loans compared to the three percent in 2008.