The President’s Report

2009 Financial Performance

The year 2009 once again proved the resiliency of the Bank under a very hostile financial environment. The Philippine banking industry had just weathered a crisis of confidence in 2008 when several small banks closed shop amidst money scandals. Though the Bank was mildly affected that year, the following year saw the effects of global financial crisis creeping into the industry. In its wake many financial institutions including this bank, for fear of large-scale credit failures, employed tightening of credit. It took an assurance from monetary authorities of reasonable financial supervision during these times of crisis to pacify a wary industry.

Through all these tumultuous events, the Bank managed to grow its resources by P2.133 billion or approximately 30% improvement from previous year. The growth came primarily from deposits, which registered an increment of P1.991 billion or 33% up from prior year. Loans, IBCL and other receivables of P6.904 billion likewise increased by P1.742 billion or 34% more than the previous year. Provision for credit and impairment losses of P70.156 million is also P1.2 million higher than last year. Liquid assets represented by cash and due from banks also managed a double-digit growth of 37% from P445 million to P609 million in 2008 and 2009 respectively. The higher liquid assets are a consequence of a larger deposit portfolio. Investments in government securities also increased by P526 million as the Bank beefed up its inventory of Agri-Agra bonds due to expected larger compliance requirement resulting from a new law to enhance government’s agrarian reform initiatives.

The results of operation for the year, ended with a modest profit of P10.618 million on the strength of large gain from sale of non-financial assets amounting to P237.134 million. Operating expenses increased minimally by P6.205 million, just 1.7% more than last year a no mean feat and a testament to the bank management’s initiative to conserve on unnecessary expenditures. Bank’s equity was boosted by an additional P100 million capital infusion after the end of the year. This is in addition to the P350 million additional capital paid up and received by the Bank in previous years. The whole amount of P450 million additional paid up capital shall be recognized as part of equity as soon as the Bank receives the approval from the Securities and Exchange Commission.

The challenges hurdled for the year need to be replicated in succeeding years in order to sustain Bank’s pattern of growth and profitability. More need to be done in the years’ ahead and as we tackle problems that come our way, I’m confident that we will always manage to pull through at all times, banking on the continuing commitment by officers and staff of the Bank.