1st Valley Bank targets more branches

MANILA, Philippines - 1st Valley Bank is targeting a total branch network of 50 next year in the Visayas and Mindanao.

It presently operates 38 branches in Mindanao and two more in Negros Oriental.

Last year, Cagayan de Oro-based thrift bank acquired Sugbuanon Rural Bank Inc., including its seven branches in Cebu.

1st Valley Bank chairman and chief executive officer Nicholas Lim said the Bangko Sentral ng Pilipinas (BSP) has already given the nod for the Cebu rural bank to be integrated into the thrift bank’s system.

“The complete integration will likely be completed in a year or two,” Lim said.

He said they are planning to open branches in Surigao and Cotabato in the remaining months of 2015 or in early 2016.

“But our thrust will remain in the Visayas and Mindanao, the island of Luzon is just too crowded,” he added.

It will also expand its SME portfolio while strengthening its agriculture loan portfolio as well as the highly-competitive personal or salary loan books.

Agri loans comprise roughly 35 percent of its loan books while salary/personal loans account for nearly 65 percent.

Presently, the bulk of its SME lending emanate from its existing micro-borrowers.

Lim said its existing micro-borrowers have expanded their businesses and require loans exceeding P300,000.

Majority of SMEs still come from the commercial and trading sector, including the robust construction segment.

Agriculture loans meanwhile are focused on the rice and corn farmers, although a growing cacao segment are in need of working capital.

1st Valley Bank has a deposit portfolio worth over P4 billion, and a loan portfolio valued at over P5 billion.

It has likewise tapped the rediscounting window of the Land Bank of the Philippines to augment gaps from weaker deposits.

Last year, Bridge Philippines Investments, an investment holding company, and a development bank, acquired 34 percent equity in 1st Valley Bank.

Bridge is a venture capital holding company with P1 billion in funding, fully dedicated to supporting rural development in the Philippines through the financial services sector.  Its major shareholders are Accion, Bamboo Finance, DEG, FMO and Bridge’s founding principal and chairman, Paul Kocourek.

It focuses on both capacity building services and capital to rural and thrift banks focused on low-income populations, micro and small businesses and the agricultural sector.