Rural bank ONB deposits near P10-B level in first semester

ONB deposits near P10-B level in first semester

By Ted Torres (The Philippine Star) Updated August 09, 2011 12:00 AM Comments (0) 

MANILA, Philippines - Total deposits of One Network Bank (ONB) is nearing the P10-billion level while total loans is approaching the P7-billion mark.

At the end of the first semester of 2011, the biggest rural bank in Mindanao reported total deposits amounting to P9.9 billion, or an approximate 34- percent growth rate from the P7.381 billion in the same period last year.

The rate of growth mimics the previous record high growth of 37 percent in deposits achieved last year versus previous year of 2009.

Total resources likewise ballooned to P12.3 billion in the first six months of 2011, or 30 percent higher than P9.48 billion recorded in the same period last year.

According to ONB president Alex V. Buenaventura, the huge increase in deposits was due to an increase in number of branches from 75 to 81 that widened the base of low-cost current accounts-savings account (CASA) depositors.

“Attractive time deposit interest rates brought in large depositors who are also commercial bank clients, and an increase in number of ATMs (automated teller machines) from 93 units to 107 units, generating a 26-percent increase in ATM active cardholder base from 251,000 in June 2010 to 316,000 end of the first half of 2011,” Buenaventura said.

ONB has a total depositor base of 525,000 accounts end June this year.

Meanwhile, loan portfolio quality improved as the non-performing loan (NPL) ratio declined to four percent end June 2011 from the six percent NPL ratio in the same period last year.

Likewise, the non-performing asset (NPA) ratio fell to just two percent in the same period from the four percent last year.

Buenaventura said that the improved collection through payroll deduction billings under the DepEd-APDS Salary Loan Program contributed to lower bad debts.

Likewise, the restructuring of its Banana Development Loan program, which utilized better time matching of farmers’ seasonal banana production cash flow and their restructured loan amortization schedule, also helped improve loan portfolio quality.

However in terms of net income in the first half of 2011, ONB reported that it remain similar to the same period last year.

Net earnings amounted to P136 million or exactly the same as the net income generated in same period last year.

Buenaventura said that the main reason for this zero growth in net income is that the bulk of loans came in the latter part of the second quarter, thus accrued interest income was minimal.

Still another reason for the flat growth rate is that treasury income on the bank’s almost P3.5 billion in liquid assets arising from the big surge in deposits are earning lower interest rates on investments in deposit instruments in commercial banks and in government securities.

“Though the net income represents zero growth versus last year, income level is still a profitable amount representing 27-percent annualized return on private investment and a 2.2-percent annualized return on assets,” the bank president added.

Risk-based capital adequacy ratio (CAR) stood at strong 25 percent, likewise unchanged from the same period last year.      

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