The Bank of the Philippine Islands (BPI) expects at least 11 percent in loan growth this year as it diversifies service channels and consumers adjust back to the usual banking environment.
“That is our organic loan. But obviously we had a boost from the Robinsons Bank portfolio,” Eric Luchango, chief finance officer, said Tuesday.
Ayala-owned BPI reported its loans in the first quarter grew by 11.9 percent, excluding loans from its merger partner Robinsons Bank, which is owned by the Gokongweis.
The merger between BPI, the surviving entity, and Robinsons Bank took effect on 1 January.
BPI president TG Limcaoco had estimated it might take two years before the latter’s system becomes fully integrated into BPI.
He said the projected loan growth will likely be driven by sustained demand for goods and services despite prospects of elevated interest rates for a long period.
Little pain from interest rates
Limcaoco stressed consumers will eventually feel little pain from interest rates as these mirror pre-pandemic levels.
“The pandemic is over and rates are fairly back to where they were. They just have to make a mental adjustment. It’s sort of like you forgot what you did last night but you are doing what you did a month ago,” he said.
BPI shared non-performing loans ratio in the first quarter settled below-industry level at only 2.12 percent.
The Bangko Sentral ng Pilipinas imposes a 6.5 percent policy rate, and stands hawkish as it aims to stabilize inflation within 2 to 4 percent amid risks to supply of goods, which are brought about by severe weather and geopolitical tensions.
Ginbee Go, head of BPI consumer banking, said the demand for auto loans has been strong due to a growing number of lower income borrowers.
“That’s why you see a lot of dealers now bringing in autos from China or more affordable models. The well-established players are also putting in more affordable models,” she observed.
Maria Josephine Ocampo, head of the bank’s mass retail products, also sees growth in microfinance and loans to small and medium enterprises or SMEs as BPI intensifies its market analysis.
“This is largely because of our hyperlocal strategy, meaning knowing the community and who the influencers are, why the sari-sari store cannot pay because for example the owner’s son went ill,” she said.
BPI said microfinance and SME loans surged by 147.4 percent and 45.8 percent, respectively, in the first quarter.
Agency banking partners
Rally Jereza, head of agency banking, said BPI has expanded its agency banking where it partners with other firms with stores more frequented by consumers.
He said the partners include Ayala Malls , Robinsons Department Stores , Rose Pharmacy, SouthStar Drug , SeaOil , Uncle John’s, Lawsons, and TGP Pharmacy.