Lender's housing, auto loans go up by more than half

MANILA, Philippines - Housing, automobile, and personal loans lent by the United Coconut Planters Bank (UCPB) surged by more than half during the first four months of this year. Besides allaying fears of a possible slowdown in personal consumption, the increase in its consumer lending business validates the bank’s strategy of aggressively marketing its personal and salary loan products, a move which was begun in 2006. In a statement, the Philippines’ 15th largest lender in terms of assets said its consumer loan business grew 57 percent to P953 million from P607 million in the same period last year. David Mercado, the lender’s first vice president for consumer banking, said that “the growth was broad-based with both the bank’s Metro Manila and provincial units reporting higher loan bookings during the period." Consumer loans lent to Metro Manila customers rose by 54% from P409 million to P631 million while similar borrowings in provincial areas soared to 63% from P198 million to P322 million, with all product lines posting hefty growth, the statement said. Housing loans accounted for the bulk of the growth as bookings nearly doubled to P455 million from P237 million a year ago on strong demand for mid-range properties. “We foresee demand in the mid-range segment to remain buoyant for the whole the year since buyers here are end-users who have long planned their property acquisitions, not for speculative investments, but to build their primary residences," Mercado said. UCPB will continue to focus on this segment to drive the growth of its home mortgage volume, and expects to get a sizeable share of the pie on account of the financing referral tie-ups it had inked with leading real estate developers, he added. Mercado said the bank also capitalized on the steady demand for new passenger cars to boost auto loan bookings by 28% from P324.9 million to P415.8 million. Sale of passenger cars grew 12% during the period, according to the Chamber of Automotive Manufacturers of the Philippines. In personal and salary loan category, UCPB expanded bookings by 81%, from P45.1 million to P81.7 million as the bank increased the number of private companies participating in its salary loan program. By mid-2006, the lender has been able to generate a total portfolio of P400 million. It also intends to further increase its market share of the salary loan business, the statement said. According to Mercado, UCPB is well positioned to sustain the growth of its consumer banking business, emphasizing that the steady growth of the bank’s low-cost current account and savings account (CASA) deposits, which fund consumer loans, has enhanced its competitive posture. At the end of April 2008, UCPB reported CASA deposits of P32.9 billion, up nearly P4.0 billion from P29.0 billion a year ago. - GMANews.TV