BANK of Commerce (BankCom) will prioritize maintaining margins and returns over aggressive loan growth this year as elevated borrowing costs continue to weigh on credit demand, management said Tuesday.
The banking arm of San Miguel Corp. said it still aimed to grow its loan book from end-2025 levels but was seeing weaker borrower appetite at current interest rate levels.
“We still aim to try to achieve some growth over our loan balance at the end of last year,” Chief Financial Officer Antonio Laquindanum said.
“At the same time, given our size, it’s a more important priority for us to maintain our margins and our return on it,” he added.
The bank’s net interest margin (NIM) rose to 4.68 percent in the first half from 4.35 percent at the end of 2025, its highest level since San Miguel acquired the bank.
Robby Carlo Gaerlan, head of corporate planning and investor relations, said the modest improvement in NIM came despite a slight contraction in the bank’s loan book and a reduction in its investment portfolio, which he said were deliberate moves to strengthen liquidity amid heightened market volatility brought about by the Middle East war.
“Given the uncertainties arising from these developments, the bank deemed it prudent to maintain elevated liquidity buffers, disciplined funding and deposit pricing, while closely monitoring effects in market developments,” Gaerlan said.
The bank expects some pressure on its margins in the second half, particularly from funding cost adjustments and changing interest rate conditions.
Still, management expressed confidence that full-year NIM would remain above last year’s level, with pricing, balance-sheet management and liquidity management expected to drive margin growth.
BankCom said it was continuing to focus on borrowers with whom it had established relations, including participants in the San Miguel ecosystem, while balancing lending opportunities against cost of liquidity.
The bank also reported that total other income fell to P785 million in the first half from P912 million a year earlier, partly due to losses in its trading investment securities portfolio amid heightened market volatility.
For expansion, Laquindanum said BankCom would be prioritizing the opening of more branch-like units, or BLUs, which operate as smaller and simplified versions of full-service branches.
BLUs enable expansion more quickly and at a lower cost, particularly in areas where establishing a full-service branch may be less viable. He said BLUs would complement full-service branches under a hub-and-spoke model.
BankCom is also targeting areas with San Miguel ecosystem clients that are currently outside its existing network, offering products such as cash management and payroll solutions to suppliers and distributors.
The bank said it was continuing to invest in government securities and technology infrastructure to support long-term earnings growth, as government securities provide a stable source of net interest income.
Technology investments, meanwhile, are intended to improve automation, platform reliability and security, and support more efficient banking services.
Shares of Bank of Commerce added P0.06, or 0.57 percent, to close at P10.50 each on Tuesday amid a marginal 0.05 percent rise for the benchmark Philippine Stock Exchange index.
