BPI bullish this year amid continued loan growth

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After posting record earnings in the first quarter, Bank of the Philippine Islands (BPI) is optimistic about its growth prospects for this year as it sees its loan book growing by 11 to 12 percent, mainly driven by higher loans from consumers.

In a media briefing following the bank’s annual stockholders’ meeting, BPI president and CEO Jose Teodoro Limcaoco said he is optimistic about the bank’s growth performance this year.

“When you look at the first quarter results and what we think about what the next nine months will be, we’re fairly confident about a good, strong year,” he told reporters. “I’m quite optimistic.”

The bank saw a record quarter net income of P15.26 billion in the first quarter, up by 26 percent compared to the same quarter in 2023 mainly driven by strong revenue growth, which offset the impact of higher operating expenses and higher provisions for probable loan losses.

Revenues increased by 25 percent to P39.5 billion. This includes a 24-percent increase in net interest income, which was attributed to higher net interest margins and above-industry average loan growth.

The Ayala-led bank’s asset quality also remained strong in the first quarter, with a nonperforming loan (NPL) ratio of 2.12 percent with an NPL cover of 136 percent.

“We continue to enhance our digital capabilities so we can offer more products and services and encourage our clients to bank with us as they find it easy, fast, and secure,” Limcaoco said.

BPI chief financial officer Eric Roberto Luchangco said the bank’s total loan book may grow to around 11 to 12 percent this year.

This excludes the boost in loan portfolio from the merger with Gokongwei-led Robinson’s Bank Corp., which contributed to about five to six percent in the first quarter.

Maria Cristina Go, head of consumer banking at BPI, said the consumer segment grew impressively despite the high interest rates, reflecting better consumer confidence.

“We’ve seen our loan releases grow very impressively in the first quarter. Our auto loans have grown by about 30 percent in loan releases, while our housing loan releases in the first quarter are up by 50 percent,” she said.

Go added that BPI saw its client base grow by 1.7 million last year, bringing the total number of customers to 11 million as of end-2023.

The bank is excited to pilot new and emerging technology this year, citing that BPI will be integrating generative artificial intelligence (AI) into its branches.

“Technology will make it easier and faster for us to be able to respond to clients. And we’re piloting gen AI initially in our branches,” she said. “We are enhancing the customer experience in the branch by going digital. We have already transformed 26 branches to digital branches.”

Maria Josephine Ocampo, head of mass retail at BPI, said credit cards posted high double-digit growth in the first quarter across new cards, customer billings and consumer loans.

This, as the bank continues to experiment and analyze customer behavior as well as strengthening the loyalty of its customers.

“On credit cards, we remain cautiously optimistic about the spending power of our customers. We see continued increase in consumer spending and we see the spending across all categories,” she said.

Meanwhile, Limcaoco said the bank continues to be vigilant against the external and domestic risks, citing the higher for longer interest rate environment amid uncertainties in inflation and the US Federal Reserve.