RIZAL COMMERCIAL Banking Corp. (RCBC) saw its housing loans grow by 4% in the first five months of the year and expects to reduce its stock of bad debt in the sector by yearend amid improving economic conditions.

Ramil M. de Villa, RCBC’s consumer lending group head, said in a press release on Wednesday that the lender’s outstanding home loans increased to P60.1 billion as of May from the P57.9 billion recorded at end-2020.

“The bookings are up 61% year on year,” Mr. De Villa added.

He attributed the increase to looser quarantine restrictions, which led to increased construction works and economic activity.

The government’s ongoing vaccination program also helped boost loan demand as more people were able to return to work.

Around 70% of the bank’s home loans benefited overseas Filipino workers (OFWs), while the remaining 30% went to local borrowers.

Mr. De Villa said the Yuchengco-led lender aims to bring down its nonperforming housing loan ratio to 6-7% this year after this hit 10% in 2020.

“OFWs returned to work abroad because of the vaccination program and easing restrictions here and their respective host countries. So that allowed the bank to start drawing down (from the loans),” Mr. De Villa said.

RCBC said in the statement that it is giving borrowers different payment options for their home loans rather than foreclosing their properties amid the crisis.

The Yuchencgo-led bank is offering the deferment of loan payments of up to six months, a review of amortization schedules, and loan restructuring schemes under its COVID-19 Assistance Recovery Enhancement Program.

Meanwhile, for newly booked housing loans, the bank offers 6-6.5% interest rate to attract more clients.

“Most banks have lowered their lending rates and offered a slew of restructuring and repricing programs for their borrowers. They are also hurdling challenges in the processing of loan applications to better help clients get their documentary approvals,” RCBC said in the statement.

Housing loans currently make up 57.1% of RCBC’s overall consumer loan portfolio, followed by car loans with a 41.5% share (P43.7 billion). The remaining 1.4% (P1.4 billion) were personal loans.

RCBC booked a net income of P1.58 billion in the first quarter, down by 31.55% from P2.308 billion a year ago. The lender’s loan portfolio jumped by 7% to P481.7 billion at end-March.

Shares in RCBC dropped by 1.36% or 30 centavos to close at P21.80 apiece on Wednesday. — BML