BANK of the Philippine Islands (BPI) is bullish on continued growth in its profit and loans this year, supported by resilient consumer spending despite elevated rates and economic risks.

“What we see… is that the consumer market remains fairly resilient. There’s a lot of confidence. We’re beginning to see very strong growth along those segments, and for us, I think the reason why our income was quite healthy was that we’ve been able to transform our book more towards the consumer side,” BPI Chief Executive Officer Jose Teodoro K. Limcaoco said in a briefing after their annual stockholders’ meeting on Tuesday.

He said the bank’s corporate loans currently make up 74% of its total loan book, down from 78% in March last year.

Profit growth is expected to be flat, depending on when the Bangko Sentral ng Pilipinas (BSP) cuts interest rates, he added.

“If the BSP doesn’t cut rates or raise rates, then our NIMs (net interest margins) should be fairly consistent,” he added.

Mr. Limcaoco said the bank’s asset quality will not be too affected by rates staying higher for longer and that the economy is strong enough to withstand elevated borrowing costs.

“Obviously, there are risks from external factors. There are some risks from inflation, maybe potentially coming from fuel or imported food,” he added.

“We are now trying to push to expand our loan book, and that necessarily means taking more risks. Traditionally, BPI has always been seen as a place where we’re extremely conservative about our credit policies. I don’t think that changes,” Mr. Limcaoco said. “I think we take measured risks, and we are willing to lend to more and more people, which means we might have a little more defaults.”

BPI expects its loans to grow by 11-12% this year, driven by a 6% boost following its merger with Robinsons Bank Corp., BPI Chief Financial Officer Eric M. Luchangco said.

BPI Head of Consumer Banking and Executive Vice-President Maria Cristina “Ginbee” L. Go said that the lender’s consumer lending business has grown significantly despite elevated borrowing costs. Housing and auto loans grew by 50% and 30%, respectively, in the first quarter, she said.

The bank is looking to launch digital initiatives to boost its consumer segment, such as incorporating generative artificial intelligence into its services, both online and in-branch, she said.

As for corporate lending, clients’ expectations for growth were stronger in the beginning of the year versus at present, with companies becoming more conservative with spending, BPI Executive Vice-President and Institutional Banking Head Juan Carlos L. Syquia said.

“What we’re seeing now is more of a mixed scenario where we still have most of our clients still looking at their growth plans for 2024 for capacity building and feed into the robust growth prospects of the country,” Mr. Syquia added.

BPI saw its net income grow by 25.8% year on year in the first quarter to P15.3 billion as higher revenues helped offset increases in loan loss provisions and operating expenses.

Its shares climbed by P4 or 3.31% to end at P125 apiece on Tuesday. — A.M.C. Sy

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