2004 - Asianbanks.net

EQUITABLE PCI BANK, INC. AND SUBSIDIARIESNOTES TO FINANCIAL STATEMENTS1. General InformationEquitable PCI Bank, Inc. (the Parent Company) is a universal bank incorporated in the Philippines, with registeredoffice address at Equitable PCI Bank Tower I, Makati Avenue corner H.V. de la Costa Street, Makati City. TheParent Company and its subsidiaries (the Group) are engaged in the business of banking, financing, leasing, realestate, insurance and stock brokering and other related services to personal, commercial, corporate and institutionalclients through a network of 459 and 420 local and international branches, offices and agencies in 2004 and 2003,respectively. The Group’s products and services include deposit-taking, lending and related services, treasury andcapital market operations, trade services, payments and cash management, and trust services.The average number of employees of the Group in 2004 and 2003 follows:2004 2003Parent Company 6,509 6,348Subsidiaries 800 8467,309 7,194The Bank’s Audit Committee reviewed and approved the accompanying comparative financial statements on March31, 2005 for release and for subsequent confirmation by the board of directors (BOD) in their regular meeting onApril 19, 2005.2. Summary of Significant Accounting PoliciesBasis of Financial Statements Preparation and PresentationThe Group’s financial statements have been prepared in accordance with accounting principles generally acceptedin the Philippines (Philippine GAAP) for the banking industry. These financial statements are prepared under thehistorical cost convention modified for the measurement at fair value of certain derivatives, trading account securities(TAS) and available for-sale securities (ASS) and for the revaluation of land. The accompanying financial statementsof the Parent Company reflect the accounts maintained in the Regular Banking Unit (RBU) and Foreign CurrencyDeposit Unit (FCDU). The financial statements individually prepared for these units are combined after eliminatinginter-unit accounts.The books of accounts of the RBU are maintained in Philippine pesos, while those of the FCDU are maintained inUnited States (US) dollars. For financial reporting purposes, the accounts of the FCDU are translated into theirequivalents in Philippine pesos based on the Philippine Dealing System weighted average rate (PDSWAR) prevailingat end of the year (for resources and liabilities) and at the average PDSWAR for the year (for income and expenses).The preparation of financial statements in accordance with Philippine GAAP requires the Group to make estimatesand assumptions that affect the reported amounts of resources, liabilities, income and expenses, and disclosures ofcontingent resources and contingent liabilities. Future events may occur which can cause the assumptions used inarriving at the estimates to change. The effects of any changes in estimates are reflected in the financial statementsas they become reasonably determinable.