China Bank Savings sees lending to reach P151B in 2025

MANILA, Philippines — The thrift banking arm of Sy family-led China Banking Corp. expects its loan portfolio to breach the P151-billion mark by 2025 as it braces for a possible surge in loans once the Bangko Sentral ng Pilipinas (BSP) starts cutting interest rates.

Similar to the projections of analysts, China Bank Savings (CBS) president James Dee on Thursday said they were also hoping for a BSP rate cut of 25 basis points in the latter part of the year, should inflation ease.

“It will actually be good for us if rates go down. We’re more than ready to fund our loan growth with our value depositors,” Dee told reporters on the sidelines of CBS’ annual stockholders meeting.

Currently, the BSP’s key policy rate stands at 6.5 percent.

CBS’ total loan portfolio reached P120.2 billion in the first quarter, driven by consumer and retail loans. This contributed to the bank’s 10-percent earnings growth to P462 million during the period, according to Dee.

By the end of the year, the country’s second-largest thrift bank hopes to see P130 billion in total loans to help reach their full-year income target of P2.15 billion, Dee said.

READ: Chinabank reports all-time high 2023 profit

This means that CBS must grow its earnings by around 19.44 percent, coming from its P1.8-billion profit last year.

“As in prior years, we’ve basically relied on our loan growth, mostly in the consumer loans sector. That is driving our forecast for the next five years,” Dee noted.

CBS chair Ricardo Chua said they were also relying on stronger demand from a younger workforce to drive growth, particularly through digital banking.

“We have done a lot of work in that area, and we will continue new initiatives to make sure we can respond to the need,” Chua said.

READ: Higher interest earnings lift Chinabank Q1 profit

Asked whether CBS’ nonperforming loans (NPL) ratio would be affected by a projected uptick in loans, Dee clarified that they had been able to manage their NPL level “quite well.”

In the January to March period, the bank’s NPL ratio eased to 3.3 percent from 4 percent the previous year.

NPLs refer to loans that are unlikely to be repaid by the borrower, meaning a lower ratio represents lower risks for banks.

Parent firm Chinabank, meanwhile, is currently undergoing a brand refresh in hopes of making its image “more resonant and engaging” to a younger generation of clients.

On Wednesday, the bank held a bell-ringing ceremony to mark the first day of trading under the new stock symbol “CBC,” shifting from “CHIB” which had been its ticker symbol since it listed on the local bourse in 1927.

“We are embracing a new era, one that aligns our ticker with our evolving brand identity,” Chinabank president and CEO Romeo Uyan Jr. said in a statement. —Meg J. Adonis