BANK OF MAKATI (A Savings Bank), Inc. (BMI) has exceeded its target loan growth for the year driven by strong demand for motorcycle loans.
In an interview, BMI President Luis M. Chua said the savings bank has surpassed its target loan growth for this year by 20%.
“We have grown our loan portfolio. Short of saying we have surpassed our target for 2018 by 20%,” Mr. Chua told BusinessWorld at the sidelines of Chamber of Thrift Banks meeting on Friday.
He added that the spike in the bank’s loan growth this year was driven by motorcycle loans, which comprise the bulk of its lending portfolio, as demand for these vehicles expand amid growing traffic problems in key cities as well as rising fuel prices.
“The higher fuel prices would enhance purchasing of motorcycles because the fuel consumption of motorcycles is far lower than that of the automobile,” he said.
Fuel prices continue to climb this year due to higher global rates and the excise tax under the new Tax Reform on Acceleration and Inclusion law which was enacted this year.
Mr. Chua added that demand for motorcycle financing is growing for both retail and business segments.
“[Our retail clients would be] those people who shifted to motorcycles simply because they want to avoid traffic and it will be cheaper and more efficient for them,” the bank president said.
On the business segment, more firms are looking into using motorcycles for better mobility versus cars.
“You have seen the emergence of Foodpanda and Lalamove. All of them are geared towards using motorcycles.”
BMI netted P507 million in the first quarter supported by loans for motorcycles and small businesses.
The lender was originally established as a rural bank in 1956. It was bought by the Ongtengco family, owner of motorcycle dealer Motortrade, in 2001 and became a savings bank in 2015.
BMI currently has 62 branches as well as 703 Motortrade branches which serve as collection agents. — Karl Angelo N. Vidal