BPI to ramp up digital infra investments

MAKATI CITY  — Ayala-led Bank of the Philippine Islands (BPI) is looking to ramp up investment in the second phase of its digitalization push over the next three years.

Speaking at the company’s annual stockholders meeting at Fairmont Makati yesterday, Chairman Jaime Augusto Zobel de Ayala said the bank has already laid the foundation in boosting the bank’s digital infrastructure.

“To help fund our digitalization efforts and support the growth of our loan portfolio, we underwent various fund-raising activities,” the top official said.

In May last year, BPI had raised P50 billion from a stock rights offering, which was complemented by an additional equity in raising debt -- a US$600 million international bond in August and a P25 billion domestic bond in December.

“We had never before raised amounts of this size in the public capital markets, which we believe is a reflection of the bold strategic initiatives that we have undertaken in recent years,” Ayala said.

President and CEO Cezar Consing said the bank’s digitalization is mainly to boost key areas such as SME (small and medium enterprise) loans, consumer loans and microfinance.

He said the second phase of the lender’s digitalization journey entails ramping up investment in technology over the next three years.

The continued digitalization efforts, he said, will focus on pushing for financial inclusion, orchestrating a digital ecosystem, digitalizing processes, introducing digital lending for SMEs, reshaping payments in the country, and adopting a mobile first distribution strategy, among others.

In the last three years, the country’s third largest bank in asset terms had spent P11.6 billion in technology, Consing said.

He pointed out digitalization is the future of banking and that BPI “will stay the course.”

“As the world becomes increasingly digitalized, embarking on this journey is a critical step to maintaining the competitive advantage of our franchise and growing our business,” he said.

He said the company’s digitalization journey’s second phase could contribute an additional 20% revenue uplift over and above its base case projections for 2019.

“Digitalization will allow us to become more financially inclusive by significantly increasing our engagement with segments of the market where the banking system as a whole is woefully under-represented,” he said.

These include the small and medium entrepreneurs and the lower-middle and lower-income customer segments.

Consing pointed out these sectors are growing at very fast rate and digitalization will reduce the cost in engaging with these segments.

“Digitalization will make financial inclusion truly sustainable,” he said.

Meanwhile, BPI also reported yesterday it posted P6.72 billion in net income in the first quarter of 2019, up 7.6% from P6.25 billion in the same period last year, and up 10.8% versus the fourth quarter of 2018.

Total revenues for the first quarter increased 23.5% to P22.78 billion, driven by 28.8% year-on-year growth in net interest income, which reached P16.05 billion.

Total loans as of March 31 stood at P1.35 trillion, reflecting a growth of 11.5% year-on-year, boosted by strong growth in corporate loans, credit card loans, and housing loans at 11.8%, 20.3% and 9.9%, respectively. Total deposits reached P1.61 trillion, up 1.3%.