Bank of Makati looks to rebalance its loan book
BANK OF MAKATI (A Savings Bank), Inc. plans to rebalance its loan portfolio this year by expanding its personal loan segment to reduce its reliance on car and motorcycle loans amid rising oil prices.
“If our target market is consumers, our concern is how rising oil prices will affect consumer spending, especially our motorcycle business,” Bank of Makati President Luis M. Chua told BusinessWorld last week.
The thrift bank’s loan book has traditionally been dominated by motorcycle financing, but the lender is now exploring ways to diversify its consumer lending products.
Mr. Chua said the bank is investing more in information technology this year as it prepares to offer digital personal loans through a mobile app.
The platform will allow borrowers to access personal loans that can be used for various purposes, including housing, vehicle purchases and other expenses.
“It’s basically capability-building,” he said, noting that the bank is upgrading its deposit and lending systems to support the mobile app and other digital banking services.
The upgrades are also aimed at expanding the bank’s lending capabilities beyond its core motorcycle financing business.
Mr. Chua added that the lender is refining its credit-scoring models as it works to improve its bad loan ratio.
“We are calibrating it to be consistent with our experience in the past year. That will improve our credit profile,” he said, adding that the bank also plans to become more aggressive in expanding its loan portfolio.
Despite concerns about economic growth and consumer sentiment, Mr. Chua said he still expects consumer lending demand to remain resilient.
Meanwhile, Bank of Makati said it is preparing to comply with the fraud management system and additional security requirements under the Anti-Financial Account Scamming Act , although Mr. Chua noted that many thrift banks are struggling to meet the deadline.
The Bangko Sentral ng Pilipinas (BSP) has given financial institutions until June 25 to implement enhanced fraud monitoring systems and introduce alternative security measures to one-time passwords.
Mr. Chua noted that while Bank of Makati is working to meet the requirements, many lenders in the thrift banking sector would prefer the deadline to be extended by at least a year.
He noted that from the banks he had spoken with, many are not yet ready.
He added that fraud management systems available in the local market remain costly for smaller lenders and might not fully suit the operational needs of thrift banks.
“For us, the offerings are still too expensive and the features do not necessarily match what we need,” he said. — Aaron Michael C. Sy
