MINDANAO-based One Network Bank posted a net income of P136 million, from January to June of this year, a 32 percent increase as compared to its net income of P103 million during the same period last year.

ONB president Alex Buenaventura, in his presentation during a business forum at Bigby's at SM City Davao, attributed the bank's net income growth to two principal drivers -- increase in deposits and higher treasury income.

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Volume of deposits during the same period, Buenventura said, grew by  26 percent from only P 5.9 billion as of June last year to P7.4 billion as of end June this year.

The P1.5 billion increase in deposits volume came mainly from savings depositors who contributed an additional P.9 billion or 29 percent increase as against last year's level.

This could be explained by the wide small depositor base of more than 590,000 accounts as of June 2010.

Last year, an average of  more than 5,000 new accounts have been opened mostly by small depositors that opened either the affordable Pera Agad ATM Pinoy Card, which requires only P100 to open, or the affordable Regular Savings Account, which a depositor can open for only P100.

This is of course made convenient by the superior accessibility of ONB, the widest banking network in Mindanao with 75 branches, according to Buenaventura.

The second major contributor to deposits growth is the Time Deposits, which contributed an additional P.6 billion or 34 percent increase as against last year's level.

"This could be explained mainly by the placements from big depositors or high networth clients who have now developed the confidence in trusting their money with ONB," Buenaventura said.

"Our theme for this year, dubbed as "The Big Bank in Countryside Mindanao", is greatly inspired by ONB's new-found trust and patronage from new big depositors from all over Mindanao," he added.

Another growth driver, the Higher Treasury Income, was generated due to excess funds from the big amount of deposits increase.

"Treasury first reduced bank's interest expenses on bills payable to a negligible amount by paying off almost all rediscounting borrowings from various creditor banks. Treasury then traded low-yield government securities into higher-yield government securities provided with back-to-back credit lines as a hedge for future liquidity requirements," Buenaventura said.

With a remarkable performance during the first half of this year, Buenventura expressed optimism they can do better during the remaining months of the year.

"Outlook for the second half of the year in terms of net income is much better than actual performance in the first half," he said.

This, he explained, is mainly due to the projected more aggressive lending under the DepEd Salary Loan Program and One Business Loan Program. Product features and delivery systems of both programs have recently been enhanced to be more competitive against other banks who have taken out market share from ONB last year.