AMID a lot of margin compression and lower trading gains due to higher interest rates, the Bank of the Philippine Islands (BPI) is optimistic that it will be able to increase its loans portfolio by 15 percent this year.
This exceeds the expectations of the Bangko Sentral ng Pilipinas (BSP), which is counting on banks to do their share in improving the country’s slow economy by increasing their loans by 10 percent this year.
With a lot of investments driven by the ability to be financed, banks help transform savings into funding for investors and capital formations, explained BPI senior vice president and consumer banking head Nabbie Alejo.
Apart from company expansions, proceeds from loans are also spent by individuals to buy cars or houses.
The increase in spending creates job opportunities and increases corporate profits.
Strong demand
“We expect that the demand for loans will continue to be strong. We projected at the start of the year to increase our loans portfolio by 15 percent and see our (overall) growth beyond 15 percent this year. Even if there will be a slowdown towards the third and fourth quarter, we think we can meet or exceed our target,” she said.
This optimism is attributed to the bank’s proper and active risk management, market analysis and fine-tuning of its products portfolio that have cushioned the company from the effects of the rapid rise of interest rates.
Despite the “very difficult interest rate environment,” BPI, for its part, reported an increase in customer flow as well as in loan volume, particularly by individual consumers who bought houses and cars, in the first quarter this year.
Alejo commented, though, that the interest rates were relatively low double-digit figures compared to the ones in the 1980s when they reached as high as 20 percent. (NRC)
