Rural Bank of Sta. Rosa (Laguna) Inc., a subsidiary of homegrown financial technology (fintech) company Salmon Group Ltd., has grown by double-digits its deposits from rich clients as well as loans to blue-collar workers during the first nine months of 2024.

Salmon co-founder and the bank’s chair Raffy Montemayor told a press briefing on Friday, Nov. 22, that end-September total net income reached P166.7 million, 98.1-times bigger than the end-2023 bottom line of only P1.7 million.

The bank’s third-quarter net income amounting to P84.2 million was also seven-percent larger than the P78.4-million bottom line in the second quarter.

“The financial position of the bank is really good,” Montemayor said.

“We’re growing it profitably and sustainably, which will allow us to inject more technology [and] people, put everything in place so that we can really scale-up the business and the bank itself, and hopefully progress its license over time,” he added.

Montemayor said they aim to be a full-fledged retail bank, and becoming a thrift bank in the near future “will make sense.”

To recall, Salmon last January bought a majority stake in the 61-year-old rural bank in Laguna province.

It also secured a $7-million investment from the International Finance Corp. (IFC), the World Bank Group’s private-sector lending arm, early this year.

Latest data showed that the bank’s total deposits climbed 15 percent quarter-on-quarter to P522.1 million as of September. Compared to end-2023 levels, end-September 2024 deposits were 5.7 times higher.

Montemayor pointed out that their depositors are mostly high net-worth individuals with deep pockets.

He disclosed that deposits increase by about P20 million per month.

This is because deposit accounts enjoy a relatively high interest rate of 8.88 percent per annum, he noted.

Meanwhile, the bank’s total loan portfolio jumped 47 percent quarter-on-quarter to P798.8 million at end-September, representing growth of 10.8 times from end of 2023 levels.

Montemayor also cited preliminary data showing loans further rose to P1.1 billion by end-October 2024. He expects to close this year’s loans, which mainly have short terms averaging eight months, at that level.

New loans are being driven by Salmon’s point-of-sale (POS) installment and cash loans, which its affiliate financing firms offer, Montemayor said.

So-called blue-collar workers like security guards, teachers, nurses, farmers, as well as drivers and riders of ride-hailing apps, among others, comprise the bulk of the bank’s borrowers, he added.

It is a market that remains underserved in the country, with up to 60 million Filipinos still “underbanked” or lacking direct access to banking services, he pointed out.

Montemayor said non-performing loans (NPLs) of this borrower segment account for about a tenth of total rural bank loans, and their bank’s own “bad” loans are currently also in that range.

While the domestic banking industry’s overall NPL ratio stood at a lower four to five percent, Montemayor isn’t worried as he noted that a growing loan portfolio should outpace bad debts.

Moving forward, Montemayor disclosed expansion plans, including Salmon’s possible Series B fund-raising in late 2025 as a last-round recapitalization to reach profitability by 2026, although he could not yet say how much additional funds would be needed next year.

Salmon is nonetheless eyeing to jack up the bank’s authorized capital to P2 billion by end-2025, Montemayor disclosed.

Subject to Bangko Sentral ng Pilipinas (BSP) approval, the bank will also open three “branch-lites” — one each at Bonifacio Global City (BGC) in Taguig City where Salmon is headquartered, Cebu, as well as a yet to be determined Mindanao location — during the first half of next year, Montemayor said.

At present, the bank has a lone branch in Bacoor City, Cavite, besides its head office in Santa Rosa City, Laguna.

Salmon will likewise launch before this year ends a prepaid card running on the MasterCard network which, Montemayor said, would be attached to customers’ revolving credit line, linked to Salmon’s app, and may be used to transact with 400,000 partner-merchants nationwide.

In a related development, Salmon Group said it has been chosen among the “Next 100 Global Companies to Watch” by this year’s Global Banking and Finance Awards.

“This recognition… reinforces our commitment to bridging the gap between traditional banking and fintech, creating impactful solutions that empower our clients in their financial journeys. As we continue to grow, we are focused on deepening our reach and delivering meaningful, customer-centric products that address the financial needs of underserved communities,” Montemayor said in a statement last Wednesday, Nov. 20.

“Being named in the ‘Next 100 Global Companies to Watch’ is a testament to the efforts of our bank to reshape financial services in Southeast Asia. This award acknowledges our progress and inspires us to broaden our reach to better serve the financial needs of more individuals and businesses across the region,” Salmon co-founder Pavel Fedorov said.

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