Online brokerage COL's earnings grow slower in 1H in absence of tax gain

MANILA - Despite the strong performance of the Philippine stock market, earnings growth for COL Financial Group Inc slowed in the first six months of this year, dragged by the absence of a tax benefit.

In a disclosure to the Philippine Stock Exchange today, COL said its consolidated net income grew 6.3 percent to P222.2 million in the first half, slower than the 14.7 percent expansion to P209.1 million in the same period last year.

"During the first half of last year, COL only paid P2.8 million in taxes as employees exercised their stock options resulting [in] an increase in tax deductible expenses," the online brokerage said. In contrast, the company paid P51.4 million in taxes in the first semester of this year.   



At end-June, revenues expanded by nearly a quarter to P443.4 million after commissions increased by nearly a third to P338.6 million and interest income jumped more than a tenth to P102.9 million.

COL rode on the strength of the Philippine stock market and the accelerating growth of its client base to post a record consolidated operating profit of P273.70 million in the six-month period, a growth of 29.2 percent year-on-year.

Cost management efforts and economies of scale pulled down expenses by 2.6 percent, the company said.

Prior to the correction that started in mid-May, the PSE index rallied by as much as 27 percent, accompanied by a 48.2 percent increase in value turnover. It hit all-time high levels 31 times to peak at 7,392.20 on May 15.

COL's customer count climbed by nearly half to 68,481 at end-June from 46,536 at end-2012. Client equity handled by COL also increased quarter-on-quarter to P46.4 billion from P34.4 billion.

"Moreover, the increase was largely brought about by net new deposits which amounted to P13.1 billion for the first six months of the year. The said factors a strong testament of the investing public's growing level of trust towards COL," the brokerage said.

The expansion in its client base sustained the improvement in COL’s market share in terms of value turnover by local investors in the PSE to 8.5 percent in the first half from 7.8 percent in 2012.

COL also handled 1.9 million trades in the PSE to remain as the number one stockbroker in terms of volume of transactions. As a result, its market share in terms of volume of transactions increased to 29.4 percent at end-June from 23.4 percent last year.

COL said its annualized return on average equity improved to 35.5 percent to remain the most profitable listed stockbroker in Asia.

"We are glad to see the continuous expansion of our client base and their investments in the Philippine Stock Exchange. At COL, we believe that our profitability is only a consequence of our client's success. Going forward, we plan to expand our products and services to better address the needs of our existing clients and other Filipino investors," COL president Dino Bate said.

source: interaksyon.com

Stock broker convicted for duping clients in 1st successful case of Securities Law violation

The Makati Regional Trial Court (RTC) has found a stockbroker guilty for violating the country's securities law, the first conviction under the 12-year old Securities Regulation Code (SRC) for Asia's oldest bourse.

In a decision, Judge Selma Palacio Alaras of RTC Branch 32 found Francisco O. Borromeo, former president of the defunct Asian Capital Equities Inc (ACEI), guilty of seven violations of the SRC. The court ordered him to pay P2.1 million.

The ruling was issued following Borromeo’s withdrawal of his not guilty plea and his voluntary entry of pleas of guilty on all seven charges. “In the course of the presentation of evidence against the accused, Mr. Borromeo reconsidered his not guilty plea and entered a plea of guilty,” said Department of Justice senior state prosecutor Peter Ong.

The landmark cases against Borromeo were filed on January 2005 on account of the unlawful and felonious acts he committed to defraud his clients, including the sale of his client’s shares without consent, the use of fictitious and dummy accounts in buying transactions, and failure to deliver the payment proceeds from the sale of the client’s shares.

Hans B. Sicat, Philippine Stock Exchange president and chief executive, said the decision is part of the bourse's good governance efforts.

“I understand that this is the first criminal conviction under the Securities Regulation Code which is one of the reasons why the PSE has been following this case closely.  The outcome of this case shows that white collar crimes are punished in this country,” Sicat said.

“We thank all the hard work of the Securities and Exchange Commission and the Department of Justice in helping ensure that justice is served to Mr. Borromeo. This should help give more confidence to the growing investing public,” Sicat said.

Borromeo was arraigned on August 14, 2007 where he entered not guilty pleas to all the charges filed against him. In May 2007, the PSE sought the help of the public in tracking down Borromeo, who went in hiding after several arrest warrants were issued against him.

ACEI was closed in 2003 and its assets, including its trading right, were liquidated in 2008 to settle its liabilities to clients.

source: interaksyon.com