Banco de Oro (BDO) posted a 4% year-on-year gain in consolidated net profits to P4.9 billion in 9M07 from the P4.7 billion pro-forma income registered in 9M06. The growth in Net Interest Income and Non-Interest Income buttressed the bottom line despite challenging operating conditions and ongoing integration efforts.

Net Interest Income grew 17% to P16.4 billion with net interest margin widening to 4.15% from 3.97%. This was a result of continued strong loan growth and improvements in the funding mix. The Bank rebalanced its earning assets by capitalizing on robust demand for higher-margin consumer loans even as overall industry-wide loan growth remained weak. Net Loans and Other Receivables increased 6% year-on-year to P295.4 billion while underlying loan growth remained robust at 15%. As a result, Investment Securities contracted 17% to P168 billion. The Bank likewise improved its funding mix by focusing on low-cost deposits while reducing its reliance on high-cost funding sources. Thus, Total Deposits remained flat at P438.7 billion while Bills Payable declined 14% to P69.1 billion.

Non-Interest Income rose 14% to P12.3 billion as higher fee-based and other income compensated for lower trading and foreign exchange gains. Service Charges and Fees climbed 26% to P6.3 billion given larger contributions from branch banking, remittances, credit cards, cash management and bancassurance. Miscellaneous Income jumped 127% to P1.8b stemming from investment banking activities and various income sources. Trading and foreign exchange gains dipped 10% to P3.7 billion amid rising emerging market risk premium and a stronger Peso.

Operating expenses expanded 17% to P19.2 billion due to increased business volumes, redeployment of the ex-UOBP branches and ongoing integration efforts. Pre-Provision Profits settled at P9.5 billion, up 13% year-on-year. In line with the Bank's conservative provisioning policy, Allowance for Impairment was higher by 81% at P3.6 billion.

BDO is presently the country's second largest banking group with Assets of P608.1 billion and Capital Funds of P58.8 billion. The Bank is among the market leaders in its core business lines, and has an extensive network of over 680 branches and more than 1,200 ATMs nationwide.