MANILA, Philippines - The Bank of the Philippine Islands (BPI) is targeting a net income growth of 10 percent this year, pinning the recovery on its credit card and insurance businesses, bank officials said yesterday.
During the bank stockholders’ meeting yesterday, BPI president and chief executive officer Aurelio R. Montinola III outlined the critical drivers of growth for 2009 under the difficult economic conditions faced by the Philippine economy, which he said serves as a challenge for the commercial bank of the Ayala Group of Companies.
He said that the first semester of the year will ride a positive tide, but expects the second half to be more difficult.
“There is no doubt in my mind that 2009 will remain difficult and unpredictable,” BPI chairman Jaime Augusto Zobel de Ayala said.
Montinola said they will strengthen their credit card and life insurance units which, he admitted have not been growing at the same pace as their competitors.
In fact, the life insurance business was one of the contributors for the drop in the bank’s net earnings last year.
Montinola said a P1.3-billion decrease in contributions of the insurance business plus the P3-billion decline in securities trading added to the lower net income in 2008.
BPI reported a net income last year of P6.4 billion, 35 percent lower than the P10 billion registered in 2007.
“We want to maximize our cross-selling opportunities in the card and insurance business,” Montinola added. Cross-selling allows the bank’s subsidiaries or sister companies to utilize or tap the bank’s branches and client base.
BPI will start an aggressive marketing strategy in tapping its existing client base to sell its cards and insurance products, which includes personal accident insurance.
Earnings from cross-selling activities are basically fee- and commission-based for the bank, but opens more opportunities or businesses.
Ayala Life Assurance Inc. practices cross-selling with BPI. The insurer is ranked sixth overall in terms of premiums last year.
The bank officials said gains from the insurance business remains untapped and under utilized.