BPI eyes another banner year

MANILA  -The Ayala Group’s Bank of the Philippine Islands (BPI) expects strong loans growth and lower credit expenses to boost 2023 profits over last year’s record earnings.

“The budget is to beat last year. That’s the plan,” BPI president Jose Teodoro K. “TG” Limcaoco told reporters on Wednesday as the banking giant launched its new mobile app.

The country’s third-largest lender, which ended 2022 with a historic high profit of P39.6 billion, sees its loan portfolio growing in the “low teens” this year as the continued reopening of the economy fuels expansion, especially in the first half of 2023.

“Loan demand continues to be resilient,” Limcaoco said.

He said real estate and automotive loans continue to grow as businesses stretch out debt terms to entice borrowers in an era of rising interest rates. While credit card rates hike spiked higher, Limcaoco said they were not seeing any rise in non-performing loans (NPL) in this segment.

He said they were also in talks with auditors to potentially bring down credit provisions, which would benefit the banking giant’s bottom line.

“We are still talking to our auditors because the auditors think we are overprovided,” he said.

BPI ended 2022 with an NPL coverage of 180.1 percent versus more than 80 percent before the global health crisis emerged three years ago.

Limcaoco said the figure continued to rise even as pandemic fears faded “because we continue to provision without the underperformance and without an increase in NPL.”

The lender is preparing for a new phase of growth as it completes the acquisition and merger with the smaller Robinsons Bank of the Gokongwei Group.

BPI merges with Gokongwei-led bank

Limcaoco said the P27-billion deal is being reviewed by regulators, including the Philippine Competition Commission, Bangko Sentral ng Pilipinas and Securities and Exchange Commission.

“We continue to think that should close before year-end where we can make [the merger] effective either Oct 1 or Jan. 1 [next year] depending on when we get approvals,” Limcaoco said.

The merger will give the Gokongwei Group a 6-percent stake in BPI but it would also give the lender better access to the sprawling business network of the Gokongweis.

BPI to tap Gokongwei network to close gap with bigger banking rivals

As BPI rationalizes its post-merger branch network, Limcaoco said they would also lean on an “agency banking” model which uses third-party businesses as banking partners.

“We have a BPI store in Lazada,” Limcaoco said, referring to the popular e-commerce portal.

“Hopefully, we will have a BPI on every storefront from Robinsons Retail, Generika and Seaoil,” he added.

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