What do BPI, China Bank, and Security Bank all have in common?
All these banks have expressed great optimism for the country’s economy this year, saying that they expect their income and loans to continue growing in 2023. The three Philippine banks also agree that slowing consumer demand amid inflation and record-high interest rates could adversely affect their operations.
Jose Teodoro K. Limcaoco, President and CEO of Bank of the Philippine Islands (BPI), said that he expects BPI to grow further this year after forming a partnership deal with Lazada earlier this week.
“This year, we should see an improvement on these numbers and our growth will come from new customers, better products, and better customer service,” he said in a press statement. “We aim to increase the number of our account holders by partnering with existing business clients that could serve as agents to onboard more Filipinos in the financial system.”
As of end-September last year, BPI was ranked as the country’s third-largest bank in terms of assets worth P2.52 trillion.
BPI also booked a net income of P39.6 billion in 2022, up 66% from the previous year, and it was driven by strong loan growth, higher net interest margins, and lower provisions.
On the other hand, China Bank sees sustained asset and profitability growth and is looking to focus more on its core businesses, cross-selling, cost management, and maximizing the bank’s distribution network while also expanding digital services.
“We expect to maintain a low-teens loan growth, both in consumer and corporate segments. We remain committed to growing our high-yielding consumer loan portfolio which would help rebalance our loan portfolio while balancing asset quality concerns on this segment,” said Patrick D. Cheng, China Bank’s Chief Finance Officer.
“China Bank will continue to prioritize improving our consumer loan portfolio while balancing our asset quality concerns this year,” he added. “On the funding side, we will focus on low-cost deposits to manage rising costs and will work closely with the conglomerates and emerging conglomerates in terms of capital market transactions. We will also allow them to access our balance sheet, as needed.”
According to Cheng, China Bank will also continue to boost its digital capabilities this year.
“We believe that digital payments will sustain its growth momentum over the medium-term because digital channels remain as the convenient and efficient banking alternatives for clients, as seen during the pandemic,” he said.
China Bank posted P1.22 trillion in assets as of end-September last year, making it the fifth-largest lender in the country today. The bank’s net income also increased by 17% year on year to P4.6 billion in the third quarter of 2022, and this was driven by higher revenues and core fee earnings.
For its part, Security Bank Corporation is expecting its retail loans to continue expanding this year.
“Our expectation for 2023 is that the growth in our retail loan portfolio will accelerate. This is after our retail loans accelerated to 12% year-on-year growth in the first nine months of 2022 from 6% earlier in the first six months, with the growth mainly coming from home loans and credit cards,” Security Bank said in a press statement.
“Our corporate clients have been a key driver of loan growth in the first nine months of 2022. While we expect continued growth in 2023, it will be a bit more tempered given the higher base and market competition. We likewise hope to accelerate growth for the commercial clients,” it said.
For 2023, Security Bank said it will continue to increase its resources to boost its retail, commercial and corporate loan portfolios, deposit, foreign exchange and capital markets, as well as investment solutions.
“In support of our vision to become the most customer-centric bank in the Philippines, we continue to invest in five priority areas to enhance customer experience. These include our employees, our data and digital infrastructure, cybersecurity, our core technology infrastructure, and continued process excellence and automation,” the press release further said. It added that it will continue to invest in digitalization and accelerate the growth of its branch network.
The lender booked an attributable net income of P2.31 billion in the third quarter of 2022, up by 35% year on year, on the back of a vastly improved performance of its core businesses. This brought its profit for the first nine months to P8.56 billion, 77.2% higher than in the same period the previous year.
As of September 2022, Security Bank was ranked as the 10th largest lender, with assets worth P838.799 billion.