CITYSAVINGS Bank, Inc. expects its loan growth to ease this year.

CITYSAVINGS BANK, Inc., the thrift banking arm of UnionBank of the Philippines, expects its lending to ease this year due to the issues on credit for teachers, even as it sees a recovery in the second half of the year.
UnionBank President and Chief Executive Officer Edwin B. Bautista told reporters on Thursday that the savings lender is expecting its loan growth to soften this year as it was unable to book salary loans for public school teachers in the first semester.
“If we end the year flat, we’ll be happy because that means we regained what we lost. Ang lalim ‘nung six months na wala kaming booking (The effect of the six months of not booking loans ran deep),” Mr. Bautista said in an event in Makati City on Thursday.
He added that the bank’s lending book in the January-June period was lower than the previous semester due to its inability to grant salary loans to teachers, which comprise the bulk of its loan book.
Earlier this year, the Department of Education suspended its Automatic Payroll Deduction System for loans and insurance payments until June as it worked on new guidelines, making lenders unable to issue credit for teachers.
Despite this, Mr. Bautista said CitySavings is hopeful to recover the lost credit bookings in the July-December period due to pent-up demand.
“[Our full-year loan growth] depends on how fast we will grow in the second half of the year whether the volume can recover or not. Hopefully it would,” the chief executive of the Aboitiz-led bank said.
“I think the pent-up demand is there so the growth will be fast for the rest of the year.”
Last year, gross loans of CitySavings grew 8.2% to P66.91 billion from the P61.86 billion logged in the same period in 2016.
Meanwhile, Mr. Bautista said the acquisition of CitySavings of Philippine Resources Savings Bank Corp. (PR Savings) is seen to be finalized in the fourth quarter.
“We’re just waiting for the final approval on PR Savings. I think by the fourth quarter, we should be able to consolidate or merge that already.”
In January, UnionBank’s savings lender signed a share purchase agreement with the Ropali Group to fully acquire PR Savings.
The Isabela-based lender is focused on motorcycle, agri-machinery and teachers’ salary loans, serving over 131,000 borrowers, mostly from the mass market segments.
PR Savings is part of the Ropali Group of Companies, a mid-sized conglomerate with focus on motorcycles and agricultural machinery. — Karl Angelo N. Vidal