Monday, December 08, 2008 [ manilatimes.net ]
THE Bank of the Philippine Islands (BPI) said it is unlikely to expand its branch network next year amid an economic slowdown.
“We will keep it steady,” Aurelio Montinola, BPI president said, referring to the bank’s number of branches.
He said the bank is looking for a partner to further expand its network and services.
“I think in the end, historically also, we’ve been very prudent. We’ll go up to a certain number but if necessary we’ll partner with someone else. I can’t say anything until there’s a memorandum of understanding,” he said.
BPI said it had generated P1.5 billion in profits in the third quarter resulting in earnings of P5.3 billion in the first nine months this year. The nine-month net income however fell 30 percent from a year ago.
Although it has no collateralized debt obligation (CDO) in its books or any direct exposure to any failed major US investment bank, BPI set aside P1.6 billion in impairment losses, P354-million higher than the previous year.
Its housing loan portfolio grew by 29 percent at end-September, due to a 33-percent increment in new loans. Auto loans were likewise up by 17 percent.
Despite lower inflation next year, Montinola said interest rates are expected to stay or could be much lower, which will be more advantageous to banks.
“We have actually negative real interest rate because [the] interest rate today is lower than the inflation rate, but no one wants it to go up. [So interest rates] will be more or less where they are today,” he said.
The bank executive said inflation remains the most important economic factor in the short term, adding price increases will average 6 percent next year, or at the low-end of the central bank’s forecast of 6 percent to 8 percent.-- Maricel E. Burgonio
