CIMB Bank eyes to extend more borrowings this year

CIMB Bank Philippines is eyeing to grow its loan portfolio by at least three times this year as consumers seek additional sources of funding. Vijay Manoharan, the digital bank’s CEO, told the Businessmirror that the CIMB is banking on the tightening of lending standards among conventional financial institutions to beef up its loan portfolio.

“If you look at industry statistics, most banks are tightening and reducing the lending facilities given the pandemic,” he said, noting there is an “unfulfilled” demand.

In fact, the growth of outstanding loans extended by universal and commercial banks declined further to 0.3 percent in November last year from 1.8 percent the previous month, according to the Bangko Sentral ng Pilipinas.

This is in contrast to the uptrend in borrowings for CIMB, Manoharan said. Last year, CIMB’S digital personal loan applications grew by 160 percent while loan disbursement improved by sixfold.

“As you can imagine, with the current economic stress, consumers need banks to help them up for that extra credit facility to get them to cross over the hurdle,” the bank official said adding that they “found a space where we can still lend.”

Asked regarding the potential increase in bad loans, Manoharan said that the bank has been closely monitoring its lending policies and credit practices, making sure that they lend responsibly.

As of end-november 2020, the Philippine banking system’s gross nonperforming loan ratio stood at 3.81 percent, which is the highest in recent years.

He shared that CIMB has an advanced risk management scheme as well, using data analytics and alternative credit model, among others, to assess the borrowers more accurately.

CIMB, meanwhile, was also aiming to grow the deposit books by at least 1.5 to two times this year. Last year, the all-digital bank’s deposits rose by 800 percent on the back of increasing customer base.

In a few months, Manoharan said that the digital bank is set to launch upgrades in its services. The mobile application will have more features and functionalities to make transactions easier and quicker.

“We are future-proofing our mobile app and we are adding new services to make transactions a lot easier,” he said. CIMB is also set to introduce Instapay soon, Manoharan said.

The bank is aiming to have 5 million customers this year.

In 2020, the bank saw its customer base doubled to over three million. Of these clients, 30 percent said CIMB was their first bank account.

“We are focused at the moment in terms of building a long-term sustainable business,” Manoharan concluded.