Banco Filipino expects OK on
unibank license this year
By Reena J. Villamor

Listed thrift bank Banco Filipino expects regulatory approval on its application to fully convert into a universal bank this year.

"We have submitted all the requirements to the Bangko Sentral last December. We hope that in the next two months, we'll get a response," bank Chairman Teodoro O. Arcenas, Jr. said at last Saturday's annual stockholders meeting.

The Monetary Board, the policy-making body of the Bangko Sentral, in 1997 approved in principle Banco Filipino's application for a unibanking license.

Due to the adverse economic conditions brought about by the regional crisis in mid-1997, the thrift bank had to twice request for an extension of the deadline set by the Bangko Sentral. These requests were granted.

Last December, Banco Filipino submitted documents to the Central Bank showing its compliance with the conditions for becoming a unibank.

"Anticipating the...issuance of a unibanking license...(the bank) is now preparing for its conversion," Mr. Arcenas said.

During the stockholders' meeting, the bank's increase in authorized capital to P 8 billion from P 5 billion was ratified. At least 25% of the bank's capital hike must be subscribed by the stockholders on or before the end of the year and payable in cash or "acceptable" real estate properties.

"The capital increase may be satisfied from the stock rights offering of the bank which is pending listing with the Philippine Stock Exchange," the bank said.

The P 8-billion authorized capital will be composed of 79 million common shares with a par value of P 100 per share and one million preferred shares with a par value of P 100 per share. Banco Filipino has P 3.4 billion in capital funds as of end-1999.

Last year, Banco Filipino recorded P 326.396 million in net income, 5.12% more than 1998's P 310.508 million.

Mr. Arcenas said the bank expects to exceed last year's net earnings. He, however, declined to give a projection.

In 1999, the bank's gross income rose 77.91% to P 3.318 billion from P 1.865 billion the other year. The bank said the growth is "substantially due to the income realized from the transfer of acquired real estate properties to the (Bangko Sentral) in settlement of the CB advances," which amounted to P 3.673 billion.

Interest income was lower at P 1.026 billion from P 1.088 billion year on year, while interest expense was higher at P 308.394 million from P 247.292 million.

After setting aside P 196.354 million in provision for probable loan losses, net interest earnings amounted to P 521.436 million. Other income was P 625.293 million while other expenses reached P 1.146 billion.

Meanwhile, Mr. Arcenas said Banco Filipino's P 18.8-billion damage claim against the Central Bank is still pending at the Makati Regional Trial Court. "The claim could increase further if (the bank) can prove that it continues to suffer damages even as its suit is being heard by the courts," Mr. Arcenas said.