Bank of Commerce slumps to P122.9 million net loss in Q1

MANILA, Philippines — The banking arm of diversified conglomerate San Miguel Corp. (SMC) incurred a net loss of P122.94 million in the first quarter, reversing a net income of P19.88 million in the same quarter last year, after booking higher provision for bad loans amid the coronavirus pandemic.

In a disclosure to the Philippine Dealing and Exchange Corp. (PDEx), Bank of Commerce said its provision for credit and impairment losses amounted to P217.34 million from January to March, 17.6 times the P12.35 million recorded in the same period last year.

This translated to a 32.1 percent jump in other expenses to P1.45 billion from P1.1 billion as compensation and fringe benefits also booked a double digit growth of 12.1 percent growth to P450.17 million from P401.51 million.

Philippine banks have increased provisions for bad loans in anticipation of higher defaults brought about by the economic fallout from the coronavirus disease 2019 or COVID-19 pandemic.

The bank’s net interest income surged by 32.3 percent to P1.24 billion from P938.03 million as interest income slipped by 4.7 percent to P1.62 billion from P1.7 billion, while interest expense plunged by 50.4 percent to P378.46 million from P763.5 million.

On the other hand, other income of Bank of Commerce plunged by 36.8 percent to P169.82 million in the first quarter of the year from P268.74 million.

The bank booked a net loss of P542,417 from trading and investment securities, reversing the net gain of P109.11 million.

Bank of Commerce booked a net income of P652.72 million last year, reversing a net loss of P16.54 million in 2018 on the back of higher net interest income and other income particularly from trading and investment securities.

The banking arm of SMC is ranked as the country’s 17th largest bank in terms of assets with P144.8 billion and 18th in terms of capital with P16.04 billion as of end 2019.