BPI eyes another record year on loan demand surge

The Ayala Group’s Bank of the Philippine Islands (BPI) expects strong loan growth and lower credit expenses to boost 2023 profits over last year’s record earnings.

“The budget is to beat last year. That’s the plan,” BPI president Jose Teodoro Limcaoco told reporters on Wednesday as the banking giant launched its new mobile app.

The country’s third-largest lender, which ended 2022 with a historic high profit of P39.6 billion, sees its loan portfolio growing in the “low teens” this year as the continued reopening of the economy fuels expansion, especially in the first half of 2023.

“Loan demand continues to be resilient,” Limcaoco said.

He added real estate and automotive loans continued to grow as businesses stretched out debt terms to entice borrowers in an era of rising interest rates. While credit card rates spiked higher, Limcaoco said they were not seeing any rise in nonperforming loans (NPL) in this segment.

He said they were also in talks with auditors to potentially bring down credit provisions, which would benefit the bottom line.

“We are still talking to our auditors because the auditors think we are overprovided,” he said.

BPI ended 2022 with an NPL coverage of 180.1 percent versus more than 80 percent before the global health crisis emerged three years ago.

Limcaoco said the figure continued to rise even as pandemic fears faded “because we continue to provision without the underperformance and without an increase in NPL.”