Gotianun-led East West Bank seeks to scale up its auto-lending business by offering attractive gas freebies as part of its goal of hitting P100 billion in total bank resources this year.
In a briefing Friday, East West Bank president Antonio Moncupa Jr. unveiled a car-financing program that offers up to P50,000 in free gas for clients availing themselves of auto loans with a size of more than P2 million. The offering is seen very timely and attractive given the upswing in global fuel prices.
The bank’s auto loan package carries a fixed interest rate of between 8 and 12 percent depending on the tenor, which ranges between 36 and 40 months. “We make sure we’re very competitive,” Moncupa said, noting that with narrowing loan spreads due to stiff competition in the banking system, it was a must to expand business volume.
East West Bank has expanded its car lending business by 26.2 percent in the first semester compared with a year ago, cementing its position as the country’s sixth biggest auto loan provider.
About P8 billion of the bank’s loans was devoted to car lending, Moncupa estimated. This represented about 18 percent of the bank’s P44-billion loan portfolio as of end-June.
The bank is hoping that it will be able to achieve a double-digit growth in consumer lending for 2011, with auto loans seen growing faster because of a quick turnaround time and booking. “In terms of new bookings this year, we’ll be much faster,” Moncupa said.
The free gas promo, which was endorsed yesterday by actor and car enthusiast Derek Ramsey, will run until Nov. 30, 2011. Car borrowers will be given a credit card with a free load of gas from retailer Petron.
The amount of free gas is dependent on the loan size, which means that higher-end car buyers will get more gas load. A loan size below P2 million but worth at least P1.5 million will entitle the borrower to P10,000 worth of free gas while a contract worth below P1.5 million but at least P800,000 will come with P5,000 in gas freebies. A loan size of below P800,000 but at least P500,000 will entitle the borrower to P3,000 worth of free gas.
The car loan program is for brand-new cars but the bank also gives financing for pre-owned cars that are “properly restored,” according to Moncupa. The bank’s processing of car loan application typically takes only about three hours for salaried borrowers and a bit longer for self-employed applicants.
East West Bank has about P86 billion in resources, making it the country’s 17th largest in terms of asset base. The goal is to hit P100 billion by year’s end.
The bank recently expanded its distribution capability with the acquisition of 46-branch rural bank Green Bank of Caraga. Two years ago, the bank also took over the consumer finance businesses of AIG bundled into AIG Philam Savings Bank.