BPI Family Savings Bank targets to grow loan portfolio by 10-15%

BPI FAMILY SAVINGS Bank (BFSB) is looking to expand its credit portfolio by 10-15% next year on expectations of strong demand for housing and auto loans.

The country’s largest thrift bank by asset is likewise considering issuing long-term negotiable certificates of deposit (LTNCDs) after finally making its foray into the capital market through a bond issuance earlier this month, said BFSB President Maria Cristina L. Go.

“Our strategies really continue to be focused on growing our consumer loans market businesses, particularly housing and auto loans,” she said in an interview with BusinessWorld on the sidelines of the listing ceremony of their maiden bond issue worth P9.6 billion on Dec. 16.

Ms. Go is bullish that loan growth can be fuelled by the country’s economic expansion, the government’s infrastructure push, as well as monetary easing by the central bank.

“We are still very optimistic on the prospects of both housing and auto loans simply because of the very good positive economic environment. The property sector remains to be a very good investment for many Filipinos particularly outside Metro Manila supported by the ‘Build, Build, Build’ program,” Ms. Go said.

Aside from housing loan demand from families which remain to be the core market of BFSB, Ms. Go also noted that they have seen an increase in millennials applying for loans to get housing in the form of condominium units.

Meanwhile, Ms. Go said they observed an initial slowdown in the first half of the year in terms of auto loan applications.

“The auto loans industry has started to pick up with ‘Build, Build, Build’ program again in full steam,” she said, adding that the delay in the passage of the 2019 national budget also dented auto loan growth in the first semester.

She said that their auto loan business is mostly buoyed by families seeking to have their own cars as well as some that are looking to operate as a driver for ride-hailing firm Grab Philippines.

The thrift bank’s loan portfolio is mainly comprised of housing (60%) and auto loans (30%). The remaining 10% is shared between the SME (small and medium-sized enterprises) sector as well as credit cards, Ms. Go said.

LTNCD ISSUANCE
The Bank of the Philippine Islands’ thrift arm is also open to issuing LTNCDs in 2020, having already secured regulatory approval to offer these instruments.

“Again, if the timing is right and there’s demand for longer-tenored deposits, which is tradable, then we’ll go and do LTNCDs,” Ms. Go said.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”

The first tranche of BFSB’s P35-billion bond program issued earlier this month was oversubscribed, with the initial target at just P2 billion. The P9.6-billion bond issue has a fixed rate of 4.3% per annum to be paid quarterly until 2022.

Ms. Go has said the issuance of the next tranches of its bonds will be a “matter of timing” and also depend on the interest rate environment. — Luz Wendy T. Noble