BPI to sell P5-B foreclosed assets

Ayala-owned Bank of the Philippine Islands (BPI) is talking with several foreign investors for the sale of some P5-billion worth of properties foreclosed by the bank.

"We have two months before it is presented for public bidding," BPI president Xavier P. Loinaz said after the bank’s stockholders had their annual meeting yesterday.

The P5-billion foreclosed properties located in Metro Manila and Metro Cebu, form part of a basket of bad assets worth P15 billion held by the bank.

Loinaz said P10 billion of these assets remain plagued with various legal and technical issues, thus preventing their immediate disposal. Last year, BPI disposed of some P1.4 billion in bad assets.

BPI said it has a non-performing loans (NPL) ratio of 9.6 percent, well below the industry average of 15 percent at the start of February this year.

BPI, the country’s second-largest lender, said it expects better profits this year despite a slow start in the first quarter.

Loinaz said consumer loan demand was growing, although the corporate side – particularly in the manufacturing sector – remained weak.

"We think we’ll do better than last year," he told reporters on the sidelines of the bank’s annual shareholders’ meeting. "The aspiration is always to improve, improve, improve."

BPI, owned by Philippine conglomerate Ayala Corp. and Singapore’s DBS Bank, posted consolidated net income of P5.17 billion last year, slightly down from P5.25 billion in 2001.

Loinaz said the bank was likely to post flat earnings in the first quarter of this year. It had net income of P1.48 billion in January to March 2002.

"The business for the last three months has not been all that exciting, it’s kind of flat," he said. "We’re talking about loans, we’re talking about earnings. We haven’t seen any major pick-up in business."