BPI sees 5%-10% expansion in its 2009 loan portfolio

MANILA, Philippines - Bank of the Philippine Islands (BPI), the banking arm of the Ayala family’s listed holding firm Ayala Corp., expects its loan portfolio to expand at a slower five to 10 percent this year compared to the 17-percent loan growth in 2008 amid a deepening global financial crisis.

In a filing with securities regulators, BPI said it will maintain the healthy diversification of its loan portfolio across market segments anchoring on its strength in corporate and consumer lending. 

Despite the highly unfavorable global economic scenario, BPI said it will continue to focus in growing its middle/SME lending, card banking, bancassurance, and explore more capital markets opportunities.

“In line with the ‘Expect More in Life with BPI’ campaign of the bank, BPI will continue to engage its customers to attain more financial progress and freedom through its high value and innovative products and excellent customer service and varied alternative channels that make banking services accessible anytime, anywhere,” said BPI.

Service-wise, BPI will preserve its leadership in technology by introducing more product and alternative channel innovations to keep up with the constant change in customer needs.

In the face of a difficult year, BPI will keep its costs under control and further strengthen its corporate governance and risk management structures.

BPI president and chief executive officer Aurelio R. Montinola III earlier said: ”We are aware of the challenges posed by the highly uncertain and volatile economic environment on business conditions. But even in these trying times, we intend to do our share to keep the economy going. We are determined to keep our lending windows open and ensure that customer funds are prudently managed and safeguarded.

BPI still holds the record as the  country’s largest bank in terms of market capitalization with a total of P125 billion or $2.63 billion as of December 2008.

Last year, BPI’s net earnings fell 35.8 percent to P6.4 billion on lower revenues, impairment losses and higher income taxes.

Net interest income stood at P19.5 billion, up 2.7 percent from the previous year despite the seven basis points drop in spreads. This was mainly due to the increased average asset base of P30.5 bilion.

Total resources amounted to P666.6 billion or an increase of 4.6 percent from the year earlier level due to a 5.2-percent expansion in deposits to P540.4 billion.

The bank’s remittance business also saw strong growth, rising 35 percent with volume reaching $4.4 billion, significantly outpacing the industry’s 15 percent.