BPI microfinance unit targets P2 billion loan book

MANILA, Philippines — BPI Direct BanKo, the microfinance arm of Ayala-led Bank of the Philippine Islands, is expanding its loan book to P2 billion this year, more than four times the P450-million recorded last year.

Cezar Consing, president and CEO of BPI, said the country’s third largest bank in terms of assets has created the business banking unit to focus on small and medium enterprises (SMEs) that currently account for less than 10 percent of its loan portfolio.

Consing said the unit would cater to over 100,000 SME clients that maintain deposits with BPI, but do not avail of other financial services, including business loans.

Recognizing that small and medium scale enterprises are important engines of economic growth, Consing said BPI intends to become the partner of choice for SMEs in the Philippines by 2023.

The Ayala-led bank, through BPI Direct BanKo, provides small business loans to self-employed microenterpreneurs, many of whom do not have access to the formal banking system for their financing needs.

“By the end of 2018, we expect to have a portfolio approaching P2 billion.  By 2022, our microfinance portfolio will be six times bigger,” Consing said.

For his part, BPI retail client segment group head Joseph Alberto Gotuaco said BPI Direct BanKo is set to double the number of branches and microbanking offices to about 200 this year from 103 last year.

BPI grew its client base by 6.6 percent to 8.5 million customers in 2017 from 7.9 million in 2016.

BPI’s large and loyal customer base has provided the bank with a big base of low cost deposits, but only 13.6 percent availed of loan products. Excluding credit card financing, the percentage drops to less than three percent.

“Recognizing the potential of consumer lending as an engine of growth, the bank overhauled its auto and housing loan processes in 2017 to reduce turnaround times and ensure that we are well-positioned to capture opportunities in these fast growing segments,” Consing said.

Furthermore, he said BPI is strengthening its partnerships with home developers and auto dealers to achieve better distribution balance.

BPI’s net income was steady at P6.25 billion in the first quarter of the year as revenues inched up 2.7 percent to P18.45 billion.

The bank’s loan book grew 17.2 percent to P1.21 trillion from January to March this year, while its deposit base rose 10.4 percent to P1.59 trillion.