Bank of Commerce's Net Income Rose 18% to P769.18 Million in Q12024

San Miguel Corporation (SMC) affiliate Bank of Commerce (BankCom) reported a 17% increase in gross revenue to P2.65 billion for the first quarter of 2024 compared to the same period in 2023. This growth led to a net profit of P769.18 million as of March 31, 2024, an 8% rise from the previous year. Return on equity (ROE) was at 9.87%.

The bank's core business, namely net interest revenue, grew steadily along with non-interest income, which contributed to the bank's ongoing prosperity. A 61% cost-to-income ratio was the outcome of careful spending combined with improved revenue streams.

These outcomes demonstrate how successful BankCom's approach is in growing its core business through appropriate investments in information technology and human capital.

March 2024 Financial Highlights (QoQ)

• Net Income rose 18% to P769.18 million from P712.90 million in Q12023
• ROE stood at 9.87% 
• Gross Revenue ended at P2.65 billion, 17% higher than the P2.27 billion in the same period in 2023
• NIM is higher at 4.46% from the 4.28% as of December 31, 2023 
• Non-interest income amounted to P398.34 million, 17% up from P340.98 million in 1Q in the previous year
• Cost to Income ratio of 61% 
• Net NPL ratio of 0.37%
• Capital levels remained strong with a Total CAR of 18.64%

Key Event

• April 30, 2024 – BankCom started the P5 billion second tranche Peso Bond Offering

Revenues

Increased net interest income as well as service, fee, and commission charges were the main drivers of BankCom's robust revenue growth.

Over 80% of total revenues come from net interest income, which increased 1.2 times to P2.25 billion from P1.93 billion the previous year. The continuous growth in loans and financial assets is responsible for the upswing. This resulted in a 4.46% net interest margin (NIM).

Service charges, fees, commissions, and gains on the acquisition of real and other properties (ROPA) accounted for P398.34 million of the total amount of other income, which was 17% more than the P340.98 million recorded in 2023.
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Trust fees, credit card fees, and investment banking costs contributed to the P250.91 million increase in service charges, fees, and commissions. The investment banking division of BankCom is still doing well, accounting for P69.55 million, or 28% of all service, fee, and commission income.

Additionally, profits from the sale of real estate, machinery, and other foreclosed assets climbed by more than two times to P79.60 million.

By putting aside P28.65 million as a provision for credit and impairment losses, the bank demonstrates its conservative attitude.

Operating expenses increased by 18% to P1.61 billion from P1.36 billion the previous year, excluding allowances for credit and impairment losses. The increases were mostly due to increases in rent and utilities, commission and service fees, taxes and licenses, and compensation and benefits.

Balance Sheet

With P231.75 billion in total assets as of the end of March 2024, BankCom had a 1.33% return on assets (ROA).

Due to growth in every category, total loans and receivables, which make up over 50% of total assets, increased 7% to P117.69 billion. The increase in loans led to a 69% loan-to-deposit ratio. The ratios of gross non-performing loans (NPL) and net NPL decreased from 1.54% and 0.44% at the end of 2023 to 1.47% and 0.37%, respectively, indicating improved asset quality.

The bank's capital funds were P31.50 billion as of right now, 2% more than P30.85 billion in 2023, owing to increased retained earnings from steadily profitable operations.

The bank maintained a robust capital adequacy ratio (CAR) of 18.64%, significantly higher than the legal minimum of 10.0%.

An affiliate of San Miguel Corporation (SMC) since 2008, Bank of Commerce is a publicly-listed universal bank focused on helping its clients, communities and conglomerate partners by delivering the best choice of financial services harnessing the strengths of the SMC Group. Bank of Commerce is identified by its logo bearing the SMC symbols of escudo and cloverleaf, and by the trademark license short name "BankCom" granted by the Intellectual Property Office (IPO) in 2020. BankCom traces its origins to the Overseas Bank of Manila which opened in Binondo, Manila in 1963.

​BankCom marked its 60th anniversary in 2023, ending the year with a record high net income of P2.8 billion, outperforming its full-year 2022 profit of P1.8 billion by 56%, the highest growth among listed Philippine banks. BankCom maintains a network of 140 branches and 250 automated teller machines (ATMs) as of March 31, 2024, strategically located nationwide.