Middle class market boosts WealthBank’s loan portfolio

The positive growth of the middle class market segment in Cebu has allowed Gaisano-controlled development bank, WealthBank, to post encouraging performance in its consumer loan facilities.

In just two years, WealthBank consumer loan portfolio has ballooned to P200 million from P40 million, fueled by the active consumer interest in auto and housing loans, said Ferdinand C. Vargas, the bank’s head for consumer loans.

Yesterday, WealthBank opened its “5th Cebu Used Car Fair” which provides a one-stop-shop venue for used car dealers to showcase their products to the market in one place, located at the Cebu Business Park.

The five-day used car fair that will end on November 18, 2007 is expected to draw more Cebuano consumers to take advantage of the car loan facility offered by WealthBank for a discounted interest rate package fixed for one year.

Vargas said WealthBank has been encouraged to hold a used car fair at least twice a year due to the active consumer loan market in Cebu.

According to Vargas the good performance in the consumer loan products, especially in car and housing loans is fueled by the rising middle income consumer base in Cebu, specifically those families with dollar-earning members or OFWs (Overseas Filipino Workers), Business Process Outsourcing (BPO) employees, and entrepreneurs.

WealthBank’s last used car fair, which was held early this year, released a total of P20 million worth of car loans, availed by Cebuano consumers.

The ongoing used car fair showcases over a hundred car models offered by big used car dealers in Cebu.

The choices include high-end used cars, including SUVs, surplus, and latest car models, Vargas said.

Despite the weakening of the dollar value to the peso, Vargas said OFWs are still investing their money on cars and residential units.

Also, the growing number of BPO workers, who are earning more than P25,000 a month are now one of the active markets for consumer loans, including the young professionals who are entering into businesses as sidelines.

During car fairs, Vargas said consumers will be able to get on-the-spot loan application for their preferred car models. Processing will only take three days.

Although, most of the working class or salary earners are not getting considerable salary increases despite the upswing of inflation, Vargas said the rise of middle class in Cebu resulted from the ability of Cebuanos to get into businesses as sidelines for their main jobs.

He said more and more people can now afford to get loans for both car and residential products, because of the increasing monthly income of some Cebuanos, due to sideline livelihood.

In 2001, the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission approved the acquisition of Danao City Development Bank by the Metro Gaisano group with its authorized capital increased to half billion pesos. Danao City Development Bank was established in 1966.

The Metro Gaisano group or Vicsal Development Corp. is the bank’s majority shareholder while its equity partners are the Development Bank of the Philippines and the Land Bank of the Philippines.  .—Ehda M. Dagooc