BPI Family eyes 12% growth in auto loans

MANILA, Philippines - BPI Family Savings Bank is eyeing a 10- to 12-percent growth in its automobile loans this year with the introduction of a free comprehensive insurance policy for all new auto loans.

Auto loans account for roughly 30 percent of the consumer loan portfolio of the thrift bank of the Bank of the Philippine Islands (BPI).

However, bank officials admitted the target growth would be difficult compared with the 2010 record sales for the bank as that year was characterized by a number of typhoons and floods that resulted in huge losses or damage to automobiles.

“Due to the large number of damaged vehicles, assemblers and repair shops were overwhelmed and unable to meet the demand. A significant number of car owners decided to acquire a new vehicle with the low interest rates,” officials said.

BPI Family senior vice president and head of auto loan division David G. Sarmiento Jr. said the prevailing low interest rate environment and the introduction of enticing promotions would be strong drivers to achieve the bank’s loan growth for the year.

 “We want to always outperform the industry,” Sarmiento said in a press launch yesterday.

He said Metro Manila auto loans remained the bread-and-butter of the thrift bank while the areas outside of Metro Manila accounted for 35 to 38 percent of total.

Sarmiento likewise revealed that the bank’s Internet applications have been making headway, with 50 percent of all applications coming from areas outside Metro Manila.

Even more revealing, he said, is that 35 percent of the total auto loans last year were by overseas Filipinos.

Meanwhile, Sarmiento said all approved auto loan applications from February until June this year will be qualified for BPI Family’s latest promotions.

If approved, the loan applicant gets a free one-year comprehensive insurance coverage from BPI/MS, an affiliate of the Ayala Corp. and BPI, equivalent to roughly three percent of face value.

The auto loan also gets a free acts of nature coverage, which is equivalent to 0.5 of face value.

Interest rates depend on the payment period or loan term, which is generally three- to five-years. For a P600,000-loan over a three-year payment period, the interest rate is P19,000, while that for a five-year period is P13,000.

“We also threw in a free BPI MasterCard with free fuel and fuel rebates when the loan is approved,” the BPI Family executive added.