BPI not interested in foreign partner

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) has no plans to take in a foreign strategic partner and tap the debt or capital markets for additional funding this year.

BPI president and chief executive officer Jose Teodoro “TG” Limcaoco told The STAR the bank has no plans to enter into a strategic partnership with foreign banks at the moment.

“No, not in our cards. Obviously we have a lot of foreign investors who have bought into our bank,” Limcaoco replied when asked if the 169-year-old bank is following other Philippine banks that took in foreign strategic partner.

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is set to receive P4.48 billion from Tokyo-based Sumitomo Mitsui Banking Corp. (SMBC) in exchange for a close to five percent stake in the bank. Other foreign investors in RCBC include Cathay Financial Holdings Co. of Taiwan and the World Bank’s International Finance Corp.

On the other hand, Japan’s Mitsubishi UFJ Financial Group (MUFG) infused P36.9 billion in exchange for a 20 percent stake in Security Bank Corp. in April 2016.

“In terms of a strategic partner, the way Security Bank has taken or RCBC has taken lately, nothing like that,” Limcaoco said.

Likewise, he said BPI has no plans to tap the debt or capital markets this year.

“Do we have any capital markets issuance planned? No we don’t.  Not this year. The bank is extremely liquid,” Limcaoco said.

The last time BPI tapped the debt market was in August last year, raising P21.5 billion from the issuance of the first ever COVID Action Response (CARE) bonds to help micro, small and medium enterprises (MSMEs) recover from the impact of the COVID-19 pandemic.

In all, the listed bank has raised P70.71 billion under its P100-billion bond and commercial paper program. This includes the P15.32 billion via the issuance of two-year peso fixed rate bonds in January 2020 and P33.89 billion in March 2019.

In the offshore debt market, BPI raised $300 million in September 2019 as it became the first Philippine bank to issue dollar-denominated ASEAN green bonds. It also raised 100 million Swiss francs from its maiden ASEAN green bond issuance to bankroll green eligible projects.

“There’s a lot of liquidity with the bank, so we don’t need to do any capital markets fundraising. Obviously, we continue with our push for deposits. But capital market transactions, none,” Limcaoco said.

Despite the aggressive 200- basis-point cut which brought the benchmark interest rate to an all-time low of two percent, bank lending remained down, shrinking by four percent in May from five percent in April as credit activity remained muted.

“The BSP has been very accommodative and they’ve kept interest rates low. Obviously, loan growth is so tepid,” Limcaoco said.

The BPI chief also said BPI is looking at zero to low single-digit levels in terms of credit growth for this year.