BPI Family sees double-digit growth in lending this year

MANILA, Philippines - BPI Family Savings Bank said it is confident its lending portfolio will grow double-digits this year, with the commercial or SME lending sector leading the way.

The thrift bank arm of the Ayala Group of Companies accounts for the bulk of consumer lending of the consolidated Bank of the Philippine Islands (BPI). In the first nine months of 2011, BPI’s consumer lending grew 11 percent.

BPI Family Savings president Jose Teodoro K. Limcaoco said auto loans expanded seven percent in the first 10 months of 2011; mortgage loans grew 11 percent, while commercial or SME lending went up 16 percent.

“We expect auto sales to be slower this year as competition remained fierce,” Limcaoco said during the press launch of 102 Paseo, the country’s first and only loans concept store.

He said external conditions, rather than a softening of domestic demand, are among the culprits for the softening of auto sales. The two major factors were the supply disruptions caused by the Japan earthquake early this year and the recent floods in Thailand that forced the temporary disruption of the supply chain of several Japanese automobile manufacturers.

“Last year was also a record year for auto sales, similar to 1997,” the bank executive added.

Nonetheless, BPI Family Savings forecast positive growth for auto loans as it continued to launch “come-ons” or promotions, such as free GPS and auto insurance.

Mortgage loans, which account for 35 percent of loan portfolio, remained strong as both demand and supply are still in an uptrend.

Limcaoco noted that the end-user market continues to lead the borrowers market followed by investors. Investors borrow from banks to fund the acquisition of property and, in turn, develop and lease out furnished units. Speculators borrow to acquire and mature properties before selling anew.

BPI Family Savings has already partnered with 16 franchisors (including Frutas, Phoenix Petroleum, Lay Bare and Figaro) that can offer franchises with the help of business loans from the thrift bank. The target is to reach 30 franchisors.

The trail-blazing Ka-Negosyo Franchising Loan introduces the so-called “life mode” in which clients pay interest on the first six months and start paying for the principal payment starting on the seventh month.

With loan amounts starting at P500,000, borrowers can start and sustain a business, as the franchise holders are freed up of cash flows that can be allotted for other starting-up costs.