Erratic weather forces bank to freeze loans
DAVAO CITY—It’s the weather pattern going crazy.
This was the gist of a statement issued by One Network Bank (ONB), Mindanao’s largest bank, in explaining its decision to freeze for six months its credit assistance to farmers engaged in coconut and palm oil development.
At the same time, ONB, in a bid not to create undue alarm among depositors, announced that it had paid stockholders 19.4 percent in stock dividends totaling P357 million covering 2012.
It was the highest stock dividend the bank has declared so far for its 1,600 shareholders and was equivalent to 36 million shares, according to Alex Buenaventura, ONB president and chief executive officer.
The figure is 130-percent higher than the P155 million in stock dividends declared and paid to stockholders last year, Buenaventura said.
While coconut and oil palm have been proven to be among Mindanao’s top high-value export crops, Buenaventura said the change in Mindanao’s weather conditions from typhoon-free to typhoon-prone made ONB think twice about lending money to farmers cultivating these crops.
Typhoons are expected to hit the country from June to December.
“We have frozen our expansion of financing these crops until December because we don’t want to finance crops only to be blown away by typhoons,” Buenaventura said.
He said ONB’s lending facility for coconut and oil palm farmers could resume in January next year. “This (loan suspension) is only temporary,” he said.
ONB, which is based in this city, has 90 branches and “micro” branches in Mindanao, five branches in Iloilo and a branch in Makati City. It maintains a total of 135 off-site and on-site automated teller machines.
Earlier, the bank declared a net profit of P556 million, which, it said, “made the bank fulfill its mission of providing its owners the highest rates on return of investment in the country.
In a statement, the bank said its resources grew by 37 percent to P21.6 billion in 2012 while its equity also reached P3.5 billion as of last April.
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