BPI Family eyes 15% loan growth

MANILA, Philippines - BPI Family Saving Bank (BPI Family Savings) is targeting loan growth of at least 15 percent this year, or roughly the same rate of 16-percent in 2013.

BPI Family Savings president Jose Teodoro K. Limcaoco expect strong economic growth, which will carry the thrift bank’s loan growth. However, there will be a few constraints.

“This will be tempered by what I call attrition, or the repayment of principal.  Auto loans is off to a strong start, with releases growing 40-percent over last year same period. But auto loans are of shorter maturities and therefore have faster pay down of principal, overall consumer loan growth will not be at the same rate,” Limcaoco explained.

The loan portfolio of the Bank of the Philippines Islands (BPI) thrift bank grew about 16 percent in 2013, with commercial and business loans growing about 28 percent.  

Auto and housing loan portfolios both grew about 13 percent.

“The auto market in 2014 is off to a fantastic start and we are seeing that here at BPI Family Savings.  In fact, the number of vehicles we financed in the first quarter is higher by 41 percent than the number of vehicles in the first three months of 2013,” the bank chief executive said.

The country’s auto market is considered bullish what with the new models being introduced by almost all the major distributors. And the inability of the public sector to introduce new or improved public transport services only favors private lending.

The thrift bank has also tapped the so-called UV Express, or private transport shuttle service.

Late last year, BPI Family Savings was mulling a loan program specifically for the UV Express business.

It did not however warrant a specific program but the level of risks were sufficient enough to include in its auto loan program. “What we have done is to understand their business and we are comfortable with the risk.”

The thrift bank’s housing portfolio accounts for just over 50 percent of total loan book.  The business loans and the auto loans are about the same size, or roughly about 25 percent for each sector.

Limcaoco said that housing would also reflect good growth due to many project – many of which started in 2010 and 2011 – are completing and will need take out financing from banks.

Another area of revenue growth is the introduction of life insurance products through its branch network, also known as bancassurance.

BPI and BPI Family Savings are marketing life insurance and the popular variable unit linked (VUL) which is both protection and investment designed. All insurance products are sold through the bancassurance joint venture of BPI and the Philippine American Life and General Insurance Co. (Philam Life).