Bankers foresee moderate growth for 2015

Markets are expected to remain volatile for the rest of the year, forcing bankers to stay focused on their core business. The main culprit is interest rates, principally dictated by the US Federal Reserve (US Fed), with the next adjustments in September.

“Volatility will be driven by interest rate uncertainties,” Nestor V. Tan, president and chief executive officer of BDO Unibank Inc., said.

But the anticipated market volatility would not, to the view of most bankers, change the positive earnings trend forecast in the second semester. In fact, bankers see 2015 as another good albeit modest year.

If the first three months financial performance is any indication, then indeed this year will be a good one.

“We believe the second half will be similar to the first semester,” the BDO chief executive added.

For Bankers Association of the Philippines (BAP) president Lorenzo V. Tan, doubledigit growth rates for loans and deposits are the order of the day.

“Loan growth will continue in the second half at between 15- and 20-percent growth rate for corporate, SME and consumer loans,” Tan, who is also president and chief executive officer of the Rizal Commercial Banking Corp. (RCBC), said.

He even went further by zeroing on SME and consumer lending as the new battlegrounds.

“It is very competitive now in the SME and consumer space as more banks adjust their loan portfolios. We are however prudent on the corporate side,” the BAP president said.

Security Banking Corp. president and chief executive officer Alfonso L. Salcedo Jr., was reportedly tapped for his expertise in the retail and consumer market.

The bank is known for its strong treasury skills and corporate base, but its retail base has been its waterloo.

For Chamber of Thrift Banks ( CTB) president Rommel S. Latinazo taking the conservative route in terms of treasury trading is the safest route, and the retail market the best route.

“Local banks will have to take conservative stance in their treasury trading position despite prospects of lower treasury income,” Latinazo said. “Banks, which derive sizeable income from treasury, may experience lower second half income.

But the CTB president said loan demand will remain strong boosting banks’ income from core lending.

Being the president of RCBC Savings Bank, he knows how important low cost deposits and strong consumer lending, can do for a bank faced with interest rate volatilities.

SMEs account for over 90- percent of all business in the Philippines, and the improving economic conditions allows the average consumer more leeway for borrowings.

A good indication is the record sale of cars of 131,465, in the first semester of the year, a new record high.

Meanwhile, most domestic bankers are in unison that more regional and global bank and non-bank financial institution will be increasing their footprint soon.