PBCom eyes bigger share of SME loans to total portfolio

MANILA, Philippines - Mid-sized Philippine Bank of Communications (PBCom) is aiming to dramatically increase the share of small and medium enterprise (SME) lending in its portfolio in the next three years as part of its reorientation towards the SME and consumer market.

PBCom chairman Eric O. Recto said the commercial bank would increase the lending portfolio share of SME to 50 percent from the present 15 percent.

The 2014 loan portfolio, amounting to P27.9 billion, showed that 15 percent went to SME lending, eight percent to consumer or retail lending, and the balance or majority devoted to corporate lending.

“We want to double SME lending next year, and reach 50 percent in the next three years,” Recto said in a press briefing yesterday.

He likewise admitted that the entry of the Lucio Co-led Puregold Group would play a major factor in its SME and consumer lending as well as expand its deposit base, which currently stand at P58 billion.

Early last year, the Puregold Group acquired a total 49-percent equity in the commercial bank through P.G. Holdings, the Co family’s holding company, for roughly P8 billion.

The minority group, composed of the Chung, Nubla and Recto families, still control 31 percent of the bank.

Puregold presently operates 210 outlets or supermarkets nationwide. Recto said that Puregold’s supplier network of over 3,000 consist mainly of SMEs.

 “We want to empower them (SMEs) by improving the financial health of the suppliers,” he said.

Financially sound suppliers has the ability to deliver their goods efficiently, thus protecting the supply chain of the retailer. It also means the opportunity for PBCom to offer a basket of banking services to the suppliers and tenants of Puregold.

It will also lead to the commercial bank having presence in all Puregold outlets nationwide.

 “That goes without saying, we will be present in all Puregold outlets nationwide,” Recto said, adding that there are many opportunities to co-locate with Puregold’s and its network of client and suppliers.

PBCom presently operates 76 full branches, 10 OBOs, and will open seven more in the first semester. It counts another 20 from its subsidiaries, the Rural Bank of Nagcarlan and Banco Dipolog Inc. It has over a hundred still unused branch licenses as a result of request, acquisitions and regulatory incentives.

In 2013, PBCom’s net income grew to P1.63 billion, and last year, it had settled all its P7.6-billion obligations with the Philippine Deposit and Insurance Corp. (PDIC).