San Miguel Corporation (SMC) affiliate Bank of Commerce (BankCom) booked a net profit of ₽1.59 billion in the first semester of the year, up 79% or 1.8X the ₽886.91 million in the same period last year. The outstanding performance translated to an ROE of 11%. 1H23 results were primarily driven by the sustained growth in the bank’s core business: higher margins and growth in fee-based income (trust, remittance, investment banking and trade finance).

Revenues
Total revenues amounted to ₽4.85 billion, 32% more than the ₽3.67 billion registered last year, due to the steady growth in net interest income, service charges, fees, and commissions, foreign exchange and ROPA related gains.

Net Interest Income for the first half of 2023 posted ₽3.95 billion, up 28% from the ₽3.08 billion in the comparable period last year. This was due to the solid expansion in the bank’s financial assets, mainly from corporate loans, and effective managing of funding cost, which resulted in a higher NIM of 4.35%.

Other income, surged 1.5x to ₽901.20 million from the ₽583.57 million last year propelled mainly by the robust fee-based revenue generating activities of the bank.

Service charges, fees and commissions posted a 24% rise to ₽448.02 million streaming mainly from Trust, Credit Card, Trade Finance and Investment Banking fees. The Bank’s remittance business, also a fee income generator, recorded a promising growth of more than 30% since 1Q 2023 given the notable performances of overseas partners coupled with the impact of the successful execution of marketing campaigns.

Foreign exchange (FX) gains rose by 18% to ₽80.81 million on account of increased volume of transactions.

The bank recorded a reversal of provisions amounting to ₽11.83 million reflecting improving credit quality and some recoveries.

Total Operating Expenses, excluding provision for credit and impairment losses, amounted to ₽2.74 billion, 7.51% higher than ₽2.55 billion in the same period last year primarily due to increase in occupancy cost, compensation and benefits, as well as subscription fees.