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BPI sees double-digit loan increase in 2019 as it boosts retail business

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BANK OF THE Philippine Islands (BPI) expects double-digit loan growth next year amid improving economic conditions as it continues to expand its retail lending business.

In a media luncheon on Thursday, BPI President and Chief Executive Officer Cezar P. Consing said its loan growth for 2019 is expected to be “in the teens” given that the economy “continues to grow the same way it has been growing.”

“It may not be the same pace of the last four, five years, but it will still be a healthy growth,” Mr. Consing told reporters yesterday.

He added that the Ayala-led bank can now be “more optimistic” given that price increases should “begin to taper off.”

“I think…the combination of oil prices having come down and with the interventions done by the government on the food side, the inflationary pressures are probably less, so inflation should begin to taper off,” he said.

“And if inflation begins to taper off, the pressure to raise interest rates will subside a little bit and I think that it might be better for the economy as a whole.”

Inflation stood at 6.7% in October, matching the previous month’s print which was a nine-year high. Month-on-month inflation likewise eased to 0.3% from 0.9% posted in September.

The central bank has raised its policy rates by 175 bps after five straight hikes to quell inflation expectations as prices of basic goods and services surged beyond the 2-4% target for 2018.

As BPI is looking at booking “healthy” loan growth next year, Mr. Consing said the bank wants to continue expanding its consumer business to hit 35% of its total loan book.

To achieve this, the official said BPI should “grow [its] consumer loans faster than the corporate segment every year. So over time, the share of the corporate comes down.”

Currently, BPI’s retail loans make up 20% of its total lending portfolio, while the corporate segment is at 80%.

Earlier this month, the lender raised P25 billion via its peso-denominated bond offer, higher than the initial guidance of P5 billion and the P15 billion announced previously. Proceeds of the fundraising activity will be used to support its expansion plans and diversify funding sources.

The Ayala-led bank reported a P5.98-billion net profit in the third quarter on the back of the double-digit expansion of its net interest income.

BPI shares went up by 20 centavos or 0.21% to P94 apiece on Thursday. — Karl Angelo N. Vidal