By Karl Angelo N. Vidal, Reporter
SECURITY BANK Corp. expects its lending business to continue growing as the central bank is seen to take a pause in its interest rate hike cycle amid normalizing inflation.
“We expect loan growth to continue while nonperforming loan (NPL) ratios will remain healthy,” Security Bank Retail Banking Segment Head Ma. Cristina A. Tingson said in an e-mail interview.
She added that the lender does not expect the Bangko Sentral ng Pilipinas (BSP) to increase its benchmark rates further as headline inflation is seen to decelerate.
Earlier this month, the central bank kept its interest rates unchanged at a nine-year high range of 4.25-5.25%, marking the end of five straight tightening moves this year.
The BSP said the recent headline inflation readings “indicate signs of receding price pressures as constraints on food supply continue to ease,” adding that price increases will return to below four percent, within the 2-4% target band of the government.
“The latest market outlook on the inflation in the Philippines is that this will decrease. Most recently, gasoline prices have decreased. Same with the price of rice. So it looks like inflation will normalize, i.e., go back to its normal path,” Ms. Tingson said.
The official added that the market “still has the capacity to absorb increases in interest rates” even as the BSP as well as other central banks have been in a rising benchmark rate cycles.
“[W]e still see robust growth in consumer loans while delinquency levels remain manageable.”
Security Bank’s third-quarter net profit climbed 5% to P2.25 billion from a year ago on the back of a surge in consumer loans and deposits.
During the said period, consumer loans grew 48% year on year and accounted for 19% of total loans. Security Bank said asset quality remained “healthy” even as its NPL ratio climbed a tad to 0.7% as of end-September from 0.6% in the previous quarter.
The lender said it is growing its retail lending to be its third business pillar, complementing its strengths in the wholesale banking and financial markets businesses.
To support this growth, Ms. Tingson said Security Bank will continue to “enhance the banking experience” for its customers across all channels.
Security Bank shares closed at P154.50 apiece on Friday, slipping P2.50 or 1.59% from its previous finish.