Chinatrust Phils. eyes larger market share of mortgage loan business

Chinatrust (Philippines) Commercial Bank Corp. (Chinatrust Phils.) is aiming to grab a significant share in the P23-billion worth of home mortgages held by major banks by convincing existing borrowers to shift their housing loans to FIVE@ZERO, the unique home loan promo crafted by Chinatrust to respond to consumers’ need for more affordable housing loan packages.

FIVE@ZERO is a first in consumer banking in the Philippines. And this is just the beginning. We’ve decided at Chinatrust that we will only launch products that are unique and provide real value to the consumer, Chinatrust president Joey Bermudez said.

The bank product allows existing home loan borrowers to get free interest payment for the last five years their 15-year loan. To make the offer more attractive, Chinatrust will give the borrower who shifts to FIVE@ZERO a two-percent rate reduction from their existing home loan rate with another bank.

For fresh loan borrowers, Chinatrust offers a welcome rate of 10 percent per annum. On top of these, the transfer of the home loan will be painless since Chinatrust will shoulder all processing fees, including appraisal, mortgage registration, cancellation fee (for refinancing only), and documentary stamp taxes.

"The competitive environment in the mortgage market today compels banks to create innovative products and services to maintain, if not dominate its target market," said Gerardo Munda, first vice president and marketing head of Chinatrust.

Inquiries about FIVE@ZERO has been overwhelming with calls coming in every four minutes on the first day it was advertised.

Chinatrust is aiming to book P500 million in new home loans from the FIVE@ZERO home loan promo.

"This is just the maiden product and we were very overwhelmed with the response. We hope that as we grow the consumer loan business, we will eventually increase the share of home loans to the bank’s total loan portfolio which amounted to P9 billion last year," Munda said.

Chinatrust hopes to see its consumer loan business contributing 30 percent to the bank’s bottomline in the next few years.

Chinatrust is one of the country’s best performing banks in 2001. The bank’s net income grew 22 percent to P244.7 million last year despite the difficult economic environment. This translates to 8.6-percent return on equity, among the highest in the banking industry.

Chinatrust’s non-performing loans (NPLs) stood at seven-percent loans as of end-2001 against the industry average of 18-percent NPL ratio. The bank’s provision for loan losses were equivalent to 86 percent of its total NPL’s as of year-end.

Chinatrust (Phils.) is a subsidiary of Chinatrust Commercial Bank Corp. of Taiwan. Chinatrust Taiwan has a global presence through its foreign branches in Hong Kong, India, Paraguay, Japan, and the US. Aside from the Philippines, it also has subsidiaries in Indonesia and Canada. Chinatrust also has representatives offices in Vietnam, Thailand, and the UK.