050907: FCDU assets grow 14%, hit all-time high

ASSETS held by foreign currency deposit units totaled $23.6 billion at end-2006, nearly 14 percent higher than a year earlier and representing an all-time high, the Bangko Sentral ng Pilipinas reported on Tuesday. Some 80 percent of the assets consisted of deposits of $18.8 billion, itself a 14-percent increase from the end-2005 level of only $16.5 billion. This number is significant in that FCDU assets are seen as the country’s second-tier foreign exchange reserve, next in importance to the Bangko Sentral ng Pilipinas’ gross international reserves. At $23.6 billion, the FCDU assets were “the highest level recorded” that surpassed the end-1997 peak of $21.7 billion. Some 96 percent of the assets were owned by expanded license or the universal banks and their regular commercial bank counterparts, according to the BSP. The thrift banking system, which has FCDU assets of $1 billion, accounted for 4.1 percent of aggregate. The FCDUs generated net income reaching $777 million in 2006 or 25 percent higher than 2005’s net income of $622 million. The BSP said the FCDUs had an 8.6-percent increase in net interest income to $568 million and a 44.6-percent rise in noninterest income during the year. Complementing these was the 5.4-percent decline in operating expenses to $126 million. As a result, the return on assets stood higher, 3.5 percent in 2006, versus year-ago level of only 3.1 percent. The bulk of earnings from assets, or 96.3 percent, was generated by the big commercial and expanded license banks; thrift banks accounted for only 3.7 percent of those earnings, the BSP said. Nearly 36 percent of FCDU assets were in the form of marketable securities, up from only 32.9 percent in 2005. Of these investments, only 12.1 percent were held to maturity, significantly down from 14.6 percent the prior year.  The FCDUs would also rather invest their assets than lend them to end users, the BSP noted. --J. Vallecera

 

 

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