BPI Family absorbs 8990 CTS receivables worth P1B

MASS HOUSING developer 8990 Holdings has unloaded P1 billion in housing receivables to leading retail bank BPI Family Savings Bank.

This partnership allows 8990 Holdings to unlock funds for recycling into the housing business in a faster way.

8990 Holdings president and chief executive officer Januario Jesus Atencio III yesterday said the company had signed a memorandum of agreement (MOA) with BPI Family for the purchase of its in-house contract to sell (CTS) receivables.

“The agreement with BPI Family is a significant milestone for 8990 as it signals the growing acceptability of 8990’s CTS receivables with the banking sector, paving the way for the creation of alternative home financing not only for 8990 but also for the entire mass housing sector,” Atencio said.

Under the arrangement, BPI Family will process the conversion of the CTS into a mortgage loan under the bank’s “Kayang-kaya Pabahay Program” (an affordable housing program).

The recourse ends once the CTS is converted into a mortgage loan even before the two-year recourse period lapses.

BPI Family is the country’s largest thrift bank in terms of assets, capital, deposits, and loans. Its assets stood at P258.1 billion while total capital amounted to P23.86 billion.

Atencio said 8990 Holdings would continue to pursue similar arrangements with other banks and financial institutions.

The CTS receivables portfolio of 8990 Holdings jumped 44 percent to P14.1 billion in 2014 from P8.16 billion in 2013. This boosted the interest income from CTS receivables by 69 percent to P901 million from P532 million. In the first semester of 2015, CTS income hit P575 million.

8890 Holdings deems this CTS portfolio as a stable source of recurring income.

Despite the double-digit increase in receivables portfolio, 8990 Holdings posted a collection efficiency of 93 percent last year.

In 2011, 8990 Holdings launched its CTS in-house facility called “CTS-Gold” where qualified buyers can avail themselves of houses at a faster turnover by paying only a 2-percent down payment, 8.5 percent to 11.5 percent interest rate a year for a maximum term of 25 years.