BPI loan portfolio expands faster than target

MANILA, Philippines - Ayala-owned Bank of Philippine Islands (BPI) has expanded its loan portfolio by a faster-than-expected 18 percent in the first quarter, a top bank official said.

In an interview on the sidelines of the bank’s annual stockholders’ meeting yesterday, BPI immediate past president and CEO Aurelio Montinola III said: “I think we did strong. We did 18 percent year-on-year on lending (for the first quarter).”

The loan growth is higher than the bank’s target of between 12 to 15 percent for 2013.

“I think the big driver will be the investment grade. The mood is very positive. I think you’ve seen that the business survey results continue to be extremely positive. We agree with the general thinking that GDP will be somewhere at six percent and that corporate earnings will continue to be healthy,” Montinola said.

Jose Teodoro Limacaoco, president of BPI Family Savings Inc., a thrift bank subsidiary of BPI, said for consumer lending alone, the bank posted a 15-percent growth.

“For this year, we continue to be very focused on the consumer market. We all know that the consumer is the engine of economic growth,” Limcaoco said.

“So the latest number we have for our consumer lending business show that our business continues to grow over 15 percent year-on-year. Primarily driven by very strong loan growth in the real estate mortgage market.”

BPI executive vice president and treasurer Antonio Paner said if they would be able to keep up with this loan portfolio level for the rest of the year, there would be no need to raise additional capital.

“We estimate that we will be able to sustain business up to 2017. We are not yet looking for possible capital raising scheme but of course that acquisition is not part of that equation. But as of now, we are business as usual, no need for more capital,” Paner said.

In the same meeting, Montinola officially retired from his post and was replaced by Cezar Consing who used to head BPI’s corporate banking division.

Consing, a seasoned international investment banker before he joined BPI in 1981, is expected to lead the bank to the next level, Montinola said.

“On overseas expansion, I think we’ll leave that for Mr. Consing to evaluate and decide. I think that the first statement is that increasingly, the world and analysts are looking at the ASEAN region as supposed to just country by country. They’re beginning to compare banks across the region, and that’s the reason why we’re preparing internally to compare not only against local competitors but also in the region and we try to mimic what the good banks are able to do,” Montinola said.

The expansion abroad would also support BPI’s aggressive plan to intensify remittance operations.

“Remittance also did well. The volume went up seven percent, which is slightly higher than six percent increase in remittance. We’ve increased our footprint by doing a lot more tie-ups and partnerships with some foreign remittance companies abroad and also pick up centers here in the country. We also set-up what we call a global financial services division, which is supposed to look into the activities of the various overseas licenses,” he said.

Under the positive economic conditions prevailing in the country, BPI achieved another banner year with its net income reaching a record high P16.3 billion with a return on equity of 17.5 percent in 2012.