BPI hikes IT spending by 50%, eyes double-digit loan growth

MANILA, Philippines — Bank of the Philippine Islands (BPI) is ramping up its information technology (IT) spending by 50 percent to  P14 billion this year from about P9 billion a year ago.

In a virtual press conference, BPI president and CEO Jose Teodoro “TG” Limcaoco said  the listed bank is anticipating a substantial investment in technology including cyber security.

“I think for 2022 our budget for digital spending for technology and IT-related is really about 50 percent higher than that of 2021,” Limcaoco said.

During the bank’s online stockholders’ meeting, Limcaoco reported that the bank continues to ramp up its IT spending amid the COVID-19 pandemic that started early 2020.

“In 2021, technology spending amounted to nearly P9 billion or about nine percent of our total revenues,” Limcaoco said.

Limcaoco said 18 percent of the total amount was dedicated to new initiatives, including building and improving customer engagement platforms as well as onboarding new partners in its opening banking business.

“Our digitalization journey reinvents our interaction with our customers,” Limcaoco said.

For this year, BPI executive vice president and COO Ramon Jocson said the bank has allocated five percent of the total budget for IT spending this year to step up  cyber security.

“Moving forward what we will be spending on are more incremental investments to monitor client behavior, to monitor fraudulent behavior. We already have a multi-factor authentication, “ Jocson said.

Jocson said the Ayala-led bank is also spending on intelligence analytics to identify vulnerabilities.

For her part, BPI chief finance officer Maria Theresa Marcial-Javier said the bank sees a 10 to 12 percent growth in lending across all segments.

As its loan book continues to expand, Javier said BPI expects its asset quality to improve further, resulting to lower provision for potential loan losses.

“Because of better prospects on the loan book, we do expect a significant reduction in provisions for this year, much lower than provisions in 2021 and definitely much lower than 2020. So that in itself is going to be a significant earnings driver,” Javier said.

BPI booked a 60 percent jump in net income to P8 billion in the first quarter as provision for potential loan losses plunged by 30.6 percent to P2.5 billion.

The bank’s loan book climbed by 7.1 percent to P1.5 trillion, while its deposit base grew faster by 13.1 percent to P1.9 trillion.