Bank of Commerce (BankCom), an affiliate of diversified conglomerate San Miguel Corporation (SMC), reported an eight percent growth in net income to P769.18 million in the first quarter of 2024 from P712.90 in the same period last year.

In a disclosure to the Philippine Stock Exchange, the bank said it posted a 17 percent increase in gross revenue to P2.65 billion for the first quarter of 2024 compared to P2.27 billion in the same period of 2023. 

“The bank’s continued profitability was driven by steady growth in its core business, specifically net interest income, alongside an increase in non-interest income. This combination of enhanced revenue streams and prudent spending resulted in a cost-to-income ratio of 61 percent,” BankCom said.

It added that these results highlight the effectiveness of BankCom's strategy, which focuses on right-sized investments in human capital and information technology to grow its core business.

BankCom’s strong revenue growth was driven by higher net interest income and service charges, fees, and commissions.

Net interest income, which comprises more than 80 percent of total revenues, grew 1.2 times to P2.25 billion from P1.93 billion in the prior year. The uptrend is attributable to the steady expansion in lending and financial assets and this translated to a net interest margin (NIM) of 4.46 percent.

Other income totaled P398.34 million, 17 percent higher from the P340.98 million reported in 2023, coming from service charges, fees, and commissions, and real and other properties acquired (ROPA) related gains.

Service charges, fees, and commissions expanded to P250.91 million, owing to investment banking, credit card, and trust fees. 

BankCom’s investment banking arm continues to thrive, contributing P69.55 million or 28 percent of total service charges, fees, and commissions.

In addition, gains on the foreclosure and sale of property and equipment and foreclosed assets increased more than two times to P79.60 million.

The bank maintains a conservative stance by setting aside P28.65 million as provision for credit and impairment losses.

Operating expenses, excluding provision for credit and impairment losses, amounted to P1.61 billion, 18 percent up from the P1.36 billion last year, driven by increases in compensation and benefits, service fees and commission, taxes and licenses, and rent and utilities.

BankCom’s total assets as of end-March 2024 stood at P231.75 billion, translating to return on assets (ROA) of 1.33 percent.

Total loans and receivables, accounting for more than 50 percent of total assets, rose seven percent to P117.69 billion, on the back of growth across all segments. The loan growth resulted in a loan-to-deposit ratio of 69 percent. 

Gross non-performing loans (NPL) and net NPL ratios were at 1.47 percent and 0.37 percent respectively, from 1.54 percent and 0.44 percent as of end-2023, reflecting improving asset quality.