BPI sees 10% growth this year

While loan demand was relatively weak for most of 2006, a strong asset base coupled with successful disposition of bad assets will keep the Bank of the Philippines Islands (BPI) on track of its 10 percent profit growth target this year, a top bank official said.

BPI president Aurelio R. Montinola III added that though spreads were down for the most part of the year, consumer lending was strong.

"As we reported to our stakeholders earlier, a conservative 10-percent growth in actual profit this year is on track," Montinola said yesterday.

Net income was recorded at P8.1 billion in 2005 and is seen to grow to almost P9 billion this year. In 2004, net earnings reached P6.7 billion.

The Ayala-led commercial bank also disposed of P4 billion in non-performing loans (NPLs) this year. So far, it has sold a total of P17.3 billion worth of NPLs in wholesale transactions.

It also rid itself of P2 billion worth of bad assets inherited from the Prudential Bank acquisition.

It sold another P3 billion worth of real and other properties acquired (ROPA) this year. Outstanding ROPAs still for disposition next year amounts to P20 billion.

The BPI official said that they will stick to retail selling with very low discounts as the property market has improved. "We sold at discounts from 20 to 40 percent last year, it will not be higher than say, five percent, next year."

Book values of the foreclosed properties are low while their appraised value are higher.

Montinola said 2006 was relatively a good year, and that if these agains are carried over to 2007, the banks and the economy in general will have "another good year."

"This year, most of the banks were busy disposing of their non-performing assets (NPAs). Next year, the banks will be more focused on the consumer market, government borrowings, and other lendings in the infrastucture and power sectors," the BPI chief executive said.