BPI to focus on credit card, insurance businesses this year

MANILA, Philippines - Ayala-led Bank of the Philippine Islands (BPI) will focus on credit card and insurance this year besides its core businesses of lending and deposit-taking, its president Aurelio R. Montinola III said. Although 2009 is expected to be a difficult year, the bank is nevertheless hoping that it will be better than 2008, Montinola said during a briefing after the company’s annual stockholders' meeting. "First quarter will be surprisingly positive for many sectors. We are hoping that we have a good first half. We may need that to cushion a difficult second half," he told reporters. BPI, which is targeting a 10 percent loan growth this year, has posted a "double-digit" growth during the first two months of the year. "But we are also qualifying that (target). There have been a lot of corporate bond issuances in the first and second quarter. Corporate lending may not be as strong as in the past going into the second semester," he said. BPI intends to offer its credit card to depositors as the bank has "relatively low market share." "Our internal studies show you have lower delinquency rates when you recommend them to depositors. That is the program that has been happening. We got very gratifying results. We have over 20 percent credit billings, new cardholders and credit card loans. That is very encouraging," he said. Montinola believed there is a "huge opportunity" by selling life insurance products of Ayala Life Assurance Inc. to its own clientele. "It has been shown worldwide, there is a huge need for insurance. With a name like BPI and Ayala Life, the progress in the first two months of the year has been positive," he said. In 2008, the bank's net income fell by 35.8 percent to P6.4 billion due to market price movement of securities. "It is hard to talk about income. What we can say is fourth quarter last year hit us hard. We have trimmed our treasury position. Going forward this year, we are on a back-to-basics mode. We will concentrate on taking deposits and lending. We hope our net interest income is strong. We hope to do better than last year," he said. Montinola gave his assurance to stockholders that the bank remains strong and its competitive banking position has improved in difficult times. While it is expected many consumer loans will likely become nonperforming given the difficult economic conditions, Montinola does not think it will be “too high an amount." - GMANews.TV