BPI sees 10 to 12% loan growth this year

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) expects its loan portfolio to book a double-digit growth of 10 to 12 percent this year as the bank focuses on growth initiatives for the consumer lending segment.

Maria Theresa Marcial Javier, chief financial officer at BPI, said the listed bank is looking at about a 15 percent increase in lending for the consumer as well as small and medium enterprises (SMEs) segments.

The bank expects its corporate loans to expand by 10 to 12 percent this year.

“For our overall loan growth, we expect something maybe like 10 to 12 percent,” Javier said.

According to Javier, BPI is focusing its growth initiatives into consumer lending that includes auto, housing, credit card and microfinance.

“We are quite happy with the growth trajectory of our credit card business and our mortgage loan business which are really the high margin credit products,” she said.

The bank reported a 7.6 percent increase in net income to P6.72 billion in the first quarter from P6.25 billion in the same quarter last year.

Javier said the bank’s net interest income surged by 28.8 percent to P16.05 billion amid an 8.8 percent rise in average asset base and a 50-basis point expansion in its net interest margin to 3.39 percent.

“Our net interest margin expansion is actually the highest in probably a decade,” Javier told reporters.

The Bangko Sentral ng Pilipinas (BSP) raised interest rates by 175 basis points in five straight rate-setting meetings between May and November to prevent inflation from spiralling out of control.

Inflation averaged 5.2 percent last year from 2.9 percent in 2017, exceeding the central bank’s two to four percent target due to elevated oil and food prices as well as weak peso.

The bank’s revenues increased by 23.5 percent to P22.78 billion, driven by 28.8 percent year-on-year growth in net interest income to P16.05 billion. This was traced to an 8.8 percent increase in average asset base and a 50-basis point expansion in net interest margin to 3.39 percent.

Its loan portfolio booked an 11.5 percent increase to P1.35 trillion as of end-March amid the strong growth in corporate loans, credit card loans, and housing loans, while its deposit base inched up by 1.3 percent to P1.61 trillion.

On the other hand, non-interest income registered a 12.4 percent increase to P6.73 billion due to increases in transaction-based service charges, credit card and rental businesses, and income from assets sold.

Operating expenses jumped by 23.8 percent to P12.07 billion due to the increase across all major categories and primarily in technology and premises, reflecting the impact of the bank’s continued investments in technology, digitalization, and its microfinance branch network.

At the end of March, BPI’s total assets stood at P2.08 trillion, up 8.9 percent, and return on assets was 1.34 percent.

Javier said the bank is spending P6 billion for its capital expenditures that include information technology upgrades as well as the opening of 14 regular BPI branches and 100 BanKO branches.