The Bank of the Philippine Islands (BPI), led by Ayala, expects its loan portfolio to grow and loan delinquencies to plateau this year as the national economy reopens and vaccinations increase. residents against COVID-19.

In a recent presentation, BPI Executive Vice President and Head of Consumer Banking Ma. Cristina Go said consumer spending in the country is likely to increase this year following the country’s upward mobility trend. , which began to reach pre-pandemic levels in the last quarter of 2021.

“While Omicron (COVID-19 variant) set us back at the start of this year, we see consumer spending really picking up in the coming months,” she said.

Go leads the financial institution’s consolidated consumer banking business, with the merger of BPI and its consumer banking arm, BPI Family Savings Bank, officially taking effect on January 1, 2022, with BPI as the surviving entity. .

“In terms of loan growth, we are aligned with [Bangko Sentral ng Pilipinas or BSP’s] outlook of around 5 to 7% this year. According to our own estimates, we will see growth in consumer loans while business loans will continue to be subdued. Nonetheless, we envision this same growth in our loan portfolios,” Go said. She noted that the central bank had been one of the first to respond to the pandemic, aggressively lowering bank reserve requirements and significantly reducing local interest rates.

BSP signal

“We also saw the BSP signal that they are very aware that we are still in the recovery phase,” she said.

“The central bank has expressed its willingness to remain patient while making the necessary adjustment to policy rates if the growth path shows sufficient traction and inflation expectations are no longer within bounds,” Go said, adding that any adjustment would likely occur towards the end of the period. year.

But Go said the current policy rate – at an all-time high of 2% – was favorable to Filipino consumers.

She added that credit availability would likely not be affected by moderate rate hikes. With banks continuously assessing and managing asset quality, the sector appears to be supportive of lending to creditworthy customers.

“And for those who already have loans and are struggling, banks continue to restructure loans or repackage them for better accessibility to existing loan customers,” Go pointed out.

But non-performing loans (NPLs) will plateau as the economy opens up, more jobs are created and business picks up.

“Generally, we think NPLs are moderate and better managed, plateauing in 2022,” Go said, adding that NPL formation would likely be modest as some industry sectors see a late recovery.

Consumption activity

As consumer spending and consumer lending are expected to accelerate this year, Go said BPI will be able to provide customers with a more seamless digital and physical experience.

“Our online transactions grew by 62% last year, and our usage continues to increase as we expand the functionality of our digital platform, and we see this as the case in the future,” said she declared.

About 56% of BPI’s customers are registered on its online banking platform. Even though branches had been open for most of the year in 2021, the percentage of its banking transactions done digitally remained at 90%.

She added that the expanded bank was able to optimize its presence while seizing opportunities to consolidate its branch presence.

“As we consolidate our branches, it allows us to optimize our resources and make the branches more accessible to more customers,” Go said.

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