San Miguel Corporation (SMC) affiliate, Bank of Commerce (BankCom), achieved a historic milestone by reporting a record-breaking net income of ₱3.02 billion as of December 31, 2024. This marks its highest profit level since joining the SMC family in 2008.
This achievement underscores BankCom’s unwavering commitment to excellence, performance, and customer-centric service. It reflects the dedication of its Board and management to establishing the bank as the leading conglomerate institution in the country.
Financial Performance Highlights
For 2024, the Bank recorded a return on equity (ROE) of 9.44%, more than double the ROE of 4.22% stated in its initial public offering (IPO) prospectus. The exceptional growth in net income was driven by robust expansion in core businesses, particularly corporate loans and program lending to SMC ecosystem clients. Additionally, increased fees and commissions from investment banking, card services, and trust operations further bolstered revenues.
Net Interest Income rose by 10% to ₱9.11 billion, driven by growth in corporate and consumer loans. The net interest margin (NIM) improved to 4.17%, reflecting the bank’s strategic pricing of loans to enhance earning assets.
Other income reached ₱1.65 billion, with service charges, fees, and commissions growing 21%. Notable contributors included underwriting fees, which nearly doubled to ₱292.68 million, alongside increases in trust, credit card, and trade finance fees.
Operational Strategies
Operating expenses (excluding credit and impairment loss provisions) increased by 8% to ₱6.67 billion, attributed to investments in human capital, technology, and transaction volume growth. Compensation rose by 17% to ₱2.64 billion, supported by workforce expansion and improved retention programs. Similarly, technology-related depreciation surged by 27% to ₱623.17 million due to IT investments.
Despite these cost increases, BankCom maintained a prudent approach to risk management, setting aside ₱139.41 million in credit and impairment loss provisions. The Bank’s efficiency efforts resulted in a cost-to-income ratio of 62%.
Solid Balance Sheet
As of December 31, 2024, BankCom’s total assets stood at ₱265.44 billion, delivering a return on assets (ROA) of 1.22%. Loan receivables grew by 25% to ₱136.51 billion, supported by robust lending across all segments, pushing the loan-to-deposit ratio to 64%. Non-performing loan (NPL) ratios improved to 1.25% (gross) and 0.49% (net), reflecting sound credit quality.
Total deposits surpassed the ₱200 billion milestone, ending the year at ₱212.01 billion—a 14% increase, fueled by promotional strategies and targeted marketing campaigns.
Financial assets at fair value through profit or loss (FVPL) and through other comprehensive income (FVOCI) surged to ₱2.88 billion and ₱19.08 billion, respectively, due to additional investments.
Resilient Capital Position
BankCom’s capital funds increased by 8% to ₱33.23 billion, despite dividend payouts of ₱0.2512 per common share amounting to ₱352.44 million. The robust earnings performance contributed to this growth, with the bank maintaining a strong capital adequacy ratio (CAR) of 17.58%, far exceeding the regulatory minimum of 10%.
Looking Ahead
With its record-breaking performance and strategic focus on growth, Bank of Commerce continues to solidify its position as a top-performing affiliate of San Miguel Corporation. As it looks to 2025, the Bank aims to build on its momentum through innovative products, customer-focused services, and prudent financial strategies.
