SECURITY BANK Corp. expects its loan portfolio to grow 13-15% this year driven by the sustainable double-digit expansion of its retail lending book.
In a press conference on Thursday, Security Bank President and Chief Executive Officer Alfonso L. Salcedo, Jr. said the commercial bank is expecting its loan book to grow 13-15% in 2019, in line with industry’s loan expansion this year and coming from a 12% growth in 2018.
“A lot depends on how the developments would go. From the trade war, how oil behaves, how inflation behaves, but it will be somewhere around there. Personally, if I were to bet, maybe around 13-15%. For Security Bank, we also see our loan growth to be somewhere around there,” Mr. Salcedo said.
He added that he sees the retail lending book of Security Bank sustaining its 40% growth this year from the 2018 level on the back of robust economic growth, which is likely to grow “north of 6%.”
Security Bank chief economist Robert Dan J. Roces sees the Philippine economy growing 6.4% this year, although this may change as they await further developments on the impasse of the 2019 national budget.
“We haven’t covered the market the way we want to. In a way, it’s still [in its] early days. That’s where my source of comfort [comes from] that we will be able to sustain 40%+, and hopefully 50%+ retail growth over a couple of years,” Mr. Salcedo said.
In particular, the bank president said personal loans, SME lending and credit card businesses are in its “early days” and seen to expand further this year.
For the bank’s wholesale loans, Mr. Salcedo is hopeful that these will post double-digit growth this year after a 7% pace in 2018, coming from high-teens growth rates seen the previous years.
“That slowdown, as open as I can be, was not demand-driven. The demand was there. We were selective in the loans we would give in terms of pricing. We walked away from loan transactions wherein loan rates were below risk-free rates. It doesn’t makes sense to lend or lose money that even eat up your capital.”
Moving forward, Mr. Salcedo said he is happy with the trajectory of Security Bank’s loan growth as its retail portfolio accounted for 20% of its total business in 2018 from being” basically non-existent” five years ago.
He added that the bank is looking at offering long-term negotiable certificates of deposit as well as peso-denominated bonds in the second half of the year.
Security Bank booked a net profit of P8.6 billion in 2018, down 16% from a year ago.
Its shares closed at P172.90 apiece on Thursday, up 20 centavos or 0.12%. — Karl Angelo N. Vidal