BPI remains upbeat about positive performance this year

MANILA, Philippines - Buoyed by double-digit growth in its main lending windows, the Ayala-controlled Bank of the Philippine Islands (BPI) remains optimistic it will turn in a positive performance this year.

“Consumer loans, for example, will still grow by impressive double digits,” Aurelio R. Montinola III, president and chief executive officer of BPI, said during the launch of the nationwide BPI Auto Madness promo.

For the first time, the Auto Madness campaign kicked off in 10 different locations nationwide, involving 16 automobile brands and will run for four consecutive days.

The auto loan market is the second biggest contributor to BPI’s consumer lending portfolio bannered by its thrift unit BPI Family Savings Bank.

Montinola described the auto loan market in the first quarter of the year as “critical.”

 “We are very curious on how the auto lending market will respond in the first quarter. It is critical,” the bank’s chief executive said.

He said the market still has the purchasing power for new vehicles but most potential customers are holding back or have gone on a wait-and-see stance due to a worldwide financial crunch.

“A strong auto loan portfolio in this period will prove the theory correct, and it can serve as a stimulant for consumer spending,” he pointed out.

BPI’s mortgage portfolio, its top consumer lending activity, is also expected to sustain its double-digit growth, largely on account of overseas Filipino workers’ spending.

BPI Family Savings Bank president Alfonso Salcedo said overseas Filipinos represent nearly 20 percent of its market.

He said demand for housing loans remains strong, although there is a noticeable tendency toward loan restructuring.

“The five- to seven-year payment periods are starting to be stretched to 10 to 15 years,” Salcedo observed.

BPI’s total loans grew 17 percent to P320 billion last year, higher than its growth target of 12 percent. Growth was broad based, with both corporate and retail loans contributing strongly. Corporate loans, inclusive of SME loans, expanded 18.5 percent while consumer lending went up 22.7 percent.

Meanwhile, Montinola said contributions from the treasury and insurance sectors will remain the “gray areas” for the commercial bank.

The insurance units recorded a P1.3-billion decrease in contribution due to non-recurring investment income in the past two years, although there is a potential for higher treasury and investment gains as interest rates soften further, he said.

Another critical area, he added, is earnings from the remittances business, which has been averaging double-digit annual growth rates.

In fact, BPI has been elevated to the industry’s Hall of Fame for registering the best remittance business among local banks.

 “It has been good for BPI and we believe it will continue to outperform the industry,” Montinola said.