Thrift banks paint rosy outlook for 2011

Thrift banks paint rosy outlook for 2011

BY ANN ROZAINNE R. GREGORIO

THRIFT BANK officials painted a rosy outlook for their sector this year on the back of consumers’ confidence in the domestic economy and a low interest rate environment.

Banks are expected to issue more auto loans this year .-- BWFILE photo
They said auto and housing loans, same as last year, are still expected to drive the expansion of their loan portfolios this year.

“For 2011, [BPI Family Savings Bank is] looking at a strong growth [for loans]. I expect a minimum increase of 11 or 12% both for the industry and our bank and that’s primarily driven by a very confident consumer base and low [interest] rates, which I think will continue until at least the first half of the year,” BPI Family Savings Bank President Teodoro K. Limcaoco told BusinessWorld in a telephone interview last week.

The real estate market and car sales are expected to continue to grow at a fast clip this year, he pointed out.

“One of the factors in the increase of loans this year will be the real estate market because there is still a significant housing backlog and we are seeing various local and national developers come out with a lot of products,” he said. “We are ready to support them (real-estate developers).”

Mr. Limcaoco also said the 29% sales growth reported by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) in the 11 months to November 2010 may not be replicated this year but the number of units sold this year could exceed the number of units sold last year.

As of end-November, CAMPI recorded sales reaching 153,163 units, around 29% higher than a year ago.

Bangko Sentral ng Pilipinas data show thrift banks’ real estate loans in the first half amounted to P107.33 billion, 2.85% up from the same period a year ago, while auto loans amounted to P54.620 billion, up by 13.75%.

Philippine Savings Bank President Pascual M. Garcia III said in a text message that the thrift banking industry is “expected to grow by double digits this year on expectations of buoyant consumer demand for cars and mortgages.”

“I think the industry can grow [by] 10% this year against last year,” he said.

For PSBank, Mr. Garcia said he expects a “12% loan growth this year” as the bank focuses on building up its consumer loans segment.

HSBC Family Savings Bank President and newly-elected Chamber of Thrift Banks President Patrick D. Cheng also expects a double-digit growth in loans for thrift banks this year.

“A double-digit growth in loans is attainable this year as consumers take advantage of the low-interest rate environment and as we expect a big demand for loans from entrepreneurs as they take advantage of the improved economic environment,” Mr. Cheng told BusinessWorld in an e-mail.

RCBC Savings Bank (RSB) President Rommel S. Latinazo echoed the positive outlook of other bank officials on loan growth this year.

“We expect our consumer loans to increase in 2011 as we expect business confidence to surge, which would result in continued business expansion,” he said, but declined to state figures.

Mr. Latinazo also OFW families are expected to buy more cars, boosting banks’ car loan portfolios.

“Demand for retail housing loans is likewise expected to remain strong this year mainly attributable to the continuing inflows of OFW remittances and generally low interest rates,” he said.

Remittances summed to to $17.069 billion as of November, 8.2% higher than the $15.780 billion in the same 11-month period a year ago.

For his part, Sterling Bank of Asia’s Senior Vice President and Chief Operating Officer William C. Whang in an email said “we expect loans to grow this year based on the government’s projection that the economy will continue to grow (albeit at a slower pace), which translates to more business activity and consumer consumption or spending.”

The economy grew by 7.5% in the first three quarters of 2010. The government has targeted a 5 to 6% growth in 2010, but aspires for a 7 to 8% expansion.

Mr. Whang agreed that demand for consumer loans be driven by real-estate, automobile and personal loans while demand for commercial loans would come from businesses that will be involved in government-led and supported projects.

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