The strong growth in commission revenues is attributable to the significant increase in the value of transactions in the Philippine Stock Exchange (PSE) and the strong growth in COL's client base. During the first half of 2012, total value turnover in the PSE grew by 43.2%. Meanwhile, COL's total client base increase to over 37,000 during the said period from 28,000 as of end 2011. This was also responsible for the strong growth in COL's asset base as client equity expanded to PhP22.1 billion as of end June from PhP16.5 billion as of end 2011.
Due to the strong growth in the COL's domestic operations, the Philippine already accounted for 91% of consolidated revenues during the first half of 2012, up from 82% for the whole of 2011.
COL also maintained its leadership position in the PSE during the first half of 2012. COL's market share in terms of volume of transactions jumped to 23% during the first half from 19% in 2011, strengthening its position as the number one stock broker in the PSE. In value terms, COL's rank also improved from 8th to 7th as it handled PhP84.6 billion worth of transactions. Its market share also increased by 20 basis points to 4.5% in the first half of 2012 from 4.3% in 2011.
Despite the strong growth of its Philippine operations, consolidated net income increased by only 14.7% during the first half to PhP209.1 million. Growth was tempered by the weak performance of HK and as COL expanded its capacity domestically leading to higher operating expenses. Revenues from HK fell by 48.2% to PhP33.6 million as market conditions continued to deteriorate, while operating expenses in the Philippine grew by 63.2% to PHP115.5 million during the first half.
"Last year, we took numerous steps to improve our level of service such as upgrading our computer systems to address the growing volume of transactions, making it easier for clients to transfer funds to their accounts, and making information more accessible to our clients by employing more communication channels and accommodating more attendees in our seminars. These efforts have clearly paid off given our growing number of clients and their expanding equity positions", says President and CEO Dino Bate.
"Although the increase in expenses associated with or expansions program tempered our earnings growth, we believe that this is necessary to ensure the sustainability of our long term organic growth. Ultimately, our profitability as a stock broker is only a consequence of our customers' success."