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Friday, April 11, 2014

BPI says lending business grew by double-digits in 1Q

MANILA – Bank of the Philippine Islands (BPI) saw sustained growth in its lending business in the first three months of the year, buoyed by its corporate and consumer lending segments.

"Where we have seen very good traction is growth in our loan book," BPI president Cezar P. Consing said on the sidelines of the Ayala-led lender's annual stockholders meeting on Thursday.

BPI executive vice president and corporate banking head Alfonso L. Salcedo Jr. said corporate loans expanded by 22 percent year-on-year in the first quarter.

"Loan growth on the corporate side has been buoyant...What is encouraging is growth has been broad-based across our respective corporate divisions," Salcedo said.

Lending to middle-market clients in Metro Manila rose by around 30 percent while the provincial clients in the same segment expanded at the "higher teens," he added.

BPI Family Savings Bank president Jose Teodoro K. Limcaoco said the consumer lending unit had a "very good start" this year with auto loan releases growing by 40 percent, faster than the industry expansion of 20-24 percent.

Housing loan releases rose in the "low teens" compared to a year ago, while loan releases for business format franchising under the Ka-Negosyo program grew in the "mid-teens," Limcaoco said.

BPI had projected its wholesale and retail lending businesses to climb by a fifth this year. Loan portfolio expanded by 21 percent to P635 billion last year from P527 billion in 2012, as lending to the corporate and consumer market segments grew by 23 percent and 13 percent, respectively.

"Growth in revenues and net income would have to be generated by higher loan balances, increases in non-interest income other than directional trading income and, eventually, higher net interest margins," BPI chairman Jaime Augusto Zobel de Ayala said in his speech during the meeting.

Anticipating a change in the interest rate regime, BPI shortened the size and tenors of its traded securities portfolio, which resulted in significant gains registered in the first quarter.

The lender earlier set a P20-billion profit guidance this year, an improvement of about six percent from the P18.8 billion registered in 2013.

Return on equity this year will slow down to 15 percent from 18.1 percent as a result of a recently completed P25 billion stock rights offering that raised the bank's capital by almost a quarter, Consing said.

The bank’s strategy is to grow organically, noting that there are no imminent acquisitions on the horizon, BPI senior vice president Joseph Albert L. Gotuaco said.

"Right now, there's nothing material going on and any transaction that we will consider has to be adequate in terms of bringing a client or geographic franchise that we don’t have," Gotuaco said.

BPI is adding 40 to 50 branches this year to its network of 825 in 2013.


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