Banco de Oro sees 20% profit hike this year

Lender eyes complete integration
with EPCIB's systems in 24 months

By Honey Madrilejos-Reyes

Reporter

BANCO de Oro Universal Corp. (BDO) of the Sy family expects to register between P3 billion to P3.1 billion in net profit this year, an increase of 20 percent to 20.4 percent from its P2.5-billion profit in 2005.

At the sidelines of the special stockholders' meeting held by the bank Wednesday, BDO president Nestor Tan said the 20-percent to 24-percent growth would be driven by the stronger interest income resulting from higher deposits and assets.

"This improvement is also being complemented by increases in our services income," Tan added.

BDO, however, is painting a different income scenario in 2007. According to Tan, the integration of the operations of BDO and its recent acquisition Equitable PCI Bank (EPCIB) would entail costs. However, he did not say how much these costs would be.

"We are seeing a reduction in our net income temporarily once we start the integration next year because we need to spend money for the network system, manpower and civil works. Our target is to complete the integration in 24 months," Tan said.

Once the integration is done, he said the merged entity would start realizing savings as well as see an improvement in earnings per share or the portion of a company's profit allocated to each outstanding share of common stock.

The merged entity, to be called Banco de Oro-Equitable PCI Bank, will undeniably become one of the top three banks in the Philippines, joining Metrobank of the Ty group and Bank of the Philippine Islands of the Ayala Corp.

Once merged, the bank would be ranked third in terms of net loans; second in total deposits; and third in total assets.

The merger would also improve the bank's foreign ownership ceiling to 22 percent, thus, becoming a bigger venue for institutional investors.

"I heard there are already a number of investors who have expressed interest in the merged bank," Tan said.

On Wednesday, BDO shares closed at P46, down 2.13 percent from December 22, the last trading day before the market took a Christmas break. On the other hand, EPCIB stocks rose 0.6 percent to end the session at P84.50.

Business Mirror
December 26, 2006