Fintech Salmon’s rural bank books higher net profit

FINANCIAL TECHNOLOGY company Salmon Group Ltd.’s subsidiary Rural Bank of Sta. Rosa (Laguna), Inc.’s net profit nearly doubled in the first half of the year.

The bank posted a net income of P151.1 million in the January-June period, higher than the P82.5 million recorded a year ago, it said in a media roundtable on Tuesday.

“This comes from the profitable loans that we have and also our business model, which is very efficient,” Salmon Co-founder and Director and Rural Bank of Sta. Rosa (Laguna) Chairman Raffy Montemayor said.

Salmon operates the Rural Bank of Sta. Rosa (Laguna) and financing company Sunprime Finance, Inc. in the Philippines.

The bank’s consumer lending portfolio grew by 33.8% to P1.2 billion at end-June from P909 million as of end-2024.

“Our core banking system is cloud-based, so we don’t invest in data centers that are very costly to maintain. We also have two branches, so we’re lean,” he said.

Salmon’s mobile app also helps the bank service its customers’ needs without them needing to go to their physical branch, he added. “So, we have less fixed costs, and we’re able to pass these savings to our customers through higher interest rates on their deposit.”

Deposits also jumped by 66.7% to P952 million in the first half from end-2024.

“One main reason for this is our very attractive 8.88% interest rate on our time deposit, which we’ve been improving,” Mr. Montemayor said. “Before it was only for one year, and now we’re providing it for up to five years. And customers have the flexibility to choose whether their interest rate is paid to their checking account with us, or it compounds with the time deposit, so they can earn a bit more.”

The bank’s return on equity stood at 58.9% as of the first half, while its return on assets was at 24.9% and its capital adequacy ratio at 32.7%.

“This is one of the highest return on equity rates for banks,” he said. “We are well positioned for any unexpected shocks in the system or in the economy, so we’re able to ensure that we’re keeping customers’ money safe.”

Last month, Salmon announced that it raised $88 million from its latest funding round to expand its operations in the Philippines and across Southeast Asia.

“That will be primarily used to inject capital into the bank to support further growth since we do have to ensure we maintain adequate capital in the bank to fund our loan portfolio,” Mr. Montemayor said.

“So, we’ll keep injecting capital as needed by the bank.” — Luisa Maria Jacinta C. Jocson