BPI DIRECT BANKO, Inc., the microfinance unit of Bank of the Philippine Islands (BPI), targets to have 200 branches at the end of the year in a bid to expand its small and medium enterprise (SME) loan segment.
“We’re looking at 200 [branches] at the end of the year. That’s a pretty fast growth rate for the SME business,” Joseph Albert L. Gotuaco, retail client segment group head of BPI, said in a press conference following the bank’s annual stockholders meeting in Makati City on Thursday.
Mr. Gotuaco said BPI Direct BanKo targets to have up to 150 branches by August.
“We opened two [branches] this week. We’re going to have 115 [and] by the end of June, I think we’ll be at 130 branches. By July or August, [we might have] 150,” he told reporters, adding that the additional 50 branches to hit the 200 target branches are yet to be approved by the central bank.
“The last 50 [still have no approval, but] it’s [already] applied. I don’t want to say 200 [because] the regulator hasn’t given us the approval, but the target is 200,” Mr. Gotuaco said, noting that some of the branches were built using the branch-lite model.
“Some of them are branch-lite and some of them are regular… You can’t tell the difference… it’s the way the branch operates. You can [distinguish] a branch-lite from a main branch just by counting the number of heads.”
In December, the Bangko Sentral ng Pilipinas approved the option for banks to set up branch-lite units. This kind of branch is dressed-down and less formal compared with the typical brick-and-mortar bank branch, and can be placed in towns and cities which are unbanked or underserved.
The branch expansion, BPI’s retail client segment group head said, will help bolster BPI Direct BanKo’s self-employed micro-entrepreneur (SEME) segment.
“[Our] SEME portfolio is around P800 million right now. That’s relatively small compared with the bank’s total portfolio, but I think it’s one of the fastest-growing segments,” he said, adding that the BPI’s subsidiary lender “would be in good shape” should it elevate its loan volume for SEME to around P1.5 billion to P2 billion.
“Because some of the branches are new, I don’t think we’ll double the loan [volume]. So [for me], if we get to P1.5-2 billion total loans, we would be in good shape.”
BPI Direct Banko’s plan to tap more SMEs is in line with the goal of its parent bank to expand its retail loan segment.
“Over the next few years, we’d like [our] corporate-retail loan [share] to actually change a little bit. So we’d like to build our SME loans, we like to build our retail loans, we like to grow our microfinance [loans],” BPI President and Chief Executive Officer Cezar P. Consing said at the briefing.
Currently, BPI’s loan portfolio consists of 80% corporate loans and only 20% retail loans, according to Mr. Consing.
“If we can execute it, this will make us more inclusive, and this will improve our net interest margins.”
BPI is conducting a stock rights offer until April 25 seen to raise P50 billion.
Proceeds from the capital raising exercise will be used to fund the expansion of its loan portfolio particularly in the consumer, small to medium enterprises and microfinance segments.
“At the same time, we’re going to take portion on this new equity that was raised to digitize the bank. For clients, that means access to online or mobile [banking],” Mr. Consing added.
BPI generated a net income of P22.4 billion in 2017, 1.7% higher than the P22.1 billion logged the previous year.
Shares in the Ayala-led bank gained P5 or 4.81% to close at P109 apiece on Thursday. — Karl Angelo N. Vidal

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