Higher interest rates not a major concern in banking business —Robinsons Bank

While the central bank is widely expected to hike rates again next month, Robinsons Bank Corp. said it should not have a significant impact on business.

“I don’t expect it to have a major impact. We ... will be affected, but hopefully we can manage it that it will not affect us negatively,” Robinsons Bank president and CEO Elfren Antonio Sarte told GMA News Online in an interview on Monday.

The bank has raised P1.781 billion from a public offering of Long Term Negotiable Certificates of Time Deposits (LTNCDs), and listed the certificates on the Philippine Dealing and Exchange Corp. in Makati City.

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) delivered back-to-back rate hikes during its last two policy meetings in light of concerns about accelerating inflation.

Inflation rate breached 5 percent in June, the fastest in at least five years. The BSP widely is expected to raise rates anew when its policy-setting Monetary Board meets in August.

“With the expectations with the US hike, and recently Indonesia announced their hike which is 50 bps (basis points), I think there’re strong expectations that BSP will do another rate hike,” Sarte said.

“That is the speculation in the market. That’s why we also learned that big investors are not putting funds in long-, because they also expect some hike with the BSP,” he said.

As the interest rate path is more or less set, Sarte said the bank will leverage on its consumer loans business.

“We still have a healthy margin because our consumer loans are also increasing. We have a healthy growth rate. The margins are pretty good,” he said.

“We are not really concerned but we need to make sure that we are able to adjust the rates also as we lend to the public.”

Earlier, Bank of the Philippine Islands president and CEO Cezar Consing said an interest rate increase would actually benefit local lenders.

“Interest rates are trending up and that always tends to help banks as long as they don’t trend ... too high,” Consing noted.

“The ability of banks to reprise their assets certainly helps their bottom lines. If they trend up too high, then you’re going to see loan losses,” he said. —VDS, GMA News