"PBCom embarks on a major expansion and modernization program
designed to strengthen the Bank and enhance profitability on a
sustained basis", PBCom President & CEO Isidro Alcantara announced
last March 15, 2004.
The Bank's three major stockholder groups have put in an additional
P3 billion bringing its total capital to more than P9 billion, making
PBCom the best capitalized commercial bank.
The Bank's three major owners are: the Luy Group, 37 percent; the Nubla Group,
28 percent; and the Chung Group, 27 percent. They are venerable Chinese names
in big business but low key.
At the same time, the Philippine Deposit Insurance Corp. (PDIC) has put in
P7.6 billion in financial enhancement. The money is invested in high-yield
government securities to backstop the unloading of PBCom's non-performing loans
into a special purpose asset vehicle (SPAV).
As a result of the massive capital infusion by PBCom owners and PDIC's financial
enhancement program, the Bank has become one of the strongest for its size with
a sustained and improved profitability moving forward.
With the fund infusion, expansion and modernization, PBCom is expected to chalk
up from 200 million to P1 billion in annual profits beginning this year.
The Bank will sell Ten (10) Billion Pesos of
non-performing loans and ROPOA to a special purpose asset vehicle (SPAV)
company. A large multinational accounting firm (KPMG) will conduct the
due diligence and valuation for these NPAs.
To help management achieve the Bank's strategic objectives, PBCom expanded its
board from 12 to 15 directors.
The PBCom SPAV could become the first real SPAV for NPL management. Previous
attempts by other banks with huge NPLs did not prove fruitful so far.
The Bank plans to focus on its strong middle to high-end Filipino-Chinese market
clientele, expanding into the wholesale banking mortgage market with its higher
yield and stable housing portfolio. PBCom also has strong and stable trust banking
Professional managers were previously brought in to improve business processes,
streamline and completely automate operations, improve efficiency with leaner
work force, and enhance credit and risk management processes.
"Good governance practices are now part of the culture of the Bank from top to
bottom. This, plus the stronger balance sheet positions us well into the future,"