Ayala-owned Bank of the Philippine Islands (BPI) expects loan growth of five to seven percent this year as lockdown measures are further eased and more sectors of the economy are reopened.

BPI Executive Vice President, Ma. Cristina “Ginbee” L. Go, said they mirror the Bangko Sentral ng Pilipinas’ (BSP) loan growth projection for 2022.

Go said the BSP’s current stance of keeping a low two-percent benchmark interest rate for the last 15 months does not affect credit availability while also helping banks’ recovery amid the pandemic.

“In terms of loan growth, we are aligned with the BSP’s outlook of about 5–7 percent this year. By our own estimates, we will see consumer loan growth while corporate loans will continue to be muted. Nevertheless, we are looking at this same growth in our loan books,” said Go in a presentation that the bank released on Tuesday, Feb. 22.

Go used to be the president of BPI Family Savings Bank and became BPI’s head of consumer banking after the sister banks officially merged last January 1.

Noting the BSP’s signalling that it will maintain an accommodative monetary policy stance for “at least the first half of the year” Go said loan growth “will (indeed) increase.”

“The central bank has expressed willingness to stay patient while making the necessary adjustment in policy rates if the growth trajectory shows enough traction and inflationary expectations are no longer within boundaries,” said Go, who also sees a possible rate hike “toward the latter part of the year.”

For now, the current two percent BSP rate is “supportive of Filipino consumers.” Go also said that the availability of credit is not affected by a low-rate environment and that the banks “are continually assessing and managing asset quality and therefore continuously lending out to clients who have the means.”

“(For) those who are already with loans and having some difficulties, banks continue to restructure loans or repackage them for better affordability to existing loan clients,” she said.

BPI is optimistic that non-performing loans or NPLs will plateau this year with bank lending moving up. “Generally, we see NPLs to be moderate and better managed, plateauing in 2022,” said Go, and that “NPL formation would probably be modest as some sectors in the industry would have a late recovery.”

For the Ayala-owned bank, Go said loan growth recovery is ensured as she sees consumer spending accelerating in line with the government’s rapid vaccination drive.

BPI’s total loans went up 4.9 percent year-on-year to P1.48 trillion in 2021 while its NPL ratio of 2.49 percent was an improvement compared to 2.68 percent in 2020.

As consumer spending and consumer loans are expected to grow this year, Go said BPI will offer seamless digital and physical banking. “Our online transactions have been growing at 62 percent the past year, and our usage continues to move up as we build the functionalities in our digital platform, and we see this as the case moving forward,” she said.

About 56 percent of BPI’s 8.5 million clients are already transacting online via its banking platform. The bank said 90 percent of its banking transactions are in digital form. “That’s a high mix, 90 percent of transactions via digital and 10 percent via branch,” said Go.

The merger and consolidation of BPI and its thrift bank which was the country’s largest savings bank, has expanded BPI’s network to 800. The migration of BPI Family clients to BPI will start next month with seven branches and should be completed by end-2022.

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

BPI posted a net profit of P24 billion last year, up 11.5 percent from 2020. However the bank’s revenues declined by 4.2 percent to P97.4 billion while its operating expenses increased by 5.4 percent to P50.73 billion in 2021.