Robinsons Bank sees loan growth slowing
By Melissa Luz T. Lopez, Senior Reporter
ROBINSONS BANK expects lending growth to ease this year, and is now recalibrating loan margins for a higher interest-rate environment.
Bank President and Chief Executive Officer Elfren Antonio S. Sarte said it is reevaluating its growth targets this year at a time of rising borrowing costs and currency trading losses.
In an interview, Mr. Sarte said it “might be hard” to sustain the 40% loan growth which the bank posted in 2017 following rate hikes introduced by the Bangko Sentral ng Pilipinas (BSP).
“Actually, we are reassessing if we can still grow by that. The problem is of course, we’re also trying to calibrate the increase in interest rates for our clients, how much can they take,” Mr. Sarte said.
The BSP has raised benchmark borrowing rates by a total of 50 basis points in two consecutive actions in May and June, in a bid to rein in surging inflation. BSP Governor Nestor A. Espenilla, Jr. has signalled that another rate hike is on the table, as he noted that policy makers are considering a “strong follow-through” action for their Aug. 9 rate-setting meeting.
Rate hikes from the BSP have brought the benchmark rates to between 3-4%, which in turn will push market yields higher. Mr. Sarte said this appears “tricky” for banks to adjust for higher rates in a way that will not turn clients away from borrowing money altogether.
“So far, we can balance our portfolio and there’s still room for growth. We just have to make sure we grow the proper channels,” Mr. Sarte said.
In turn, the bank is targeting to expand its non-interest income to keep growing.
The bank is likewise gearing up for a foray into merchant acquisition, offering point-of-sale debit and credit card payment services to the retail network via its parent firm, which controls a number of retail assets.
Recently, Robinsons Bank also started issuing credit cards to boost its consumer segment.
“The nice thing is it’s fee income. The real strategy is to grow core income because there’s no trading (gains),” Mr. Sarte said, referring to the slim gains from foreign exchange trading due to a weak peso.
“You have to scale the bank so you are trying to really work on getting all these forms of income and make sure the bank is a player in all these various fields,” he added, noting that the bank is “uniquely positioned” given its sister companies like the Robinsons malls and budget carrier Cebu Pacific.
Looking ahead, Mr. Sarte said the bank is keen on scaling up as a universal bank and eventually going public. The bank has sought approval from regulators to increase its capital stock to P27 billion from the current P15 billion.
Mr. Sarte is confident that the bank’s biggest shareholders, JG Summit Holdings Inc. and Robinsons Retail Holdings Inc., can inject the additional funding to meet the P20-billion capital requirement set by the BSP for unibank status. Making it to the top tier would allow the bank to offer more sophisticated products and services to clients.
Currently, Robinsons Bank is licensed as a commercial lender and is the 19th biggest in the industry with P102.829 billion assets at end-March, according to central bank data.
