BDO UNIBANK, Inc. expects above-industry loan growth this year despite weakening business sentiment as it looks to expand its lending to middle-market clients.
The bank expects to boost its loan book by 13% to about P4.4 trillion by year-end, slightly higher than the industry average, BDO Institutional Banking Head Charles M. Rodriguez told BusinessWorld in a recent interview.
The bank’s gross customer loans climbed 14% to P3.5 trillion at end-September as all market segments experienced growth.
Credit growth would be supported by the consumer segment, which has been expanding faster than its corporate lending business, he said. “Over one third of our loan portfolio is consumer. It’s the high point.”
BDO’s lending to the consumer sector is expanding by 15-16%, driven by car loans and credit cards, while its institutional loans are growing by about 12%.
They expect to close the year with a P2.5-trillion institutional loan book, up from P2.2 trillion at end-2024.
The bank is boosting efforts to tap middle-market clients or the small business segment with the help of its thrift lending arm BDO Network Bank, Inc., Mr. Rodriguez said.
BDO Network Bank, formerly One Network Bank, Inc., was converted to a thrift bank from a rural bank in May. BDO took over One Network Bank in 2015 in a transaction valued at P6.7 billion
BDO Network Bank was the fifth-biggest thrift lender in terms of assets with P141.36 billion as of end-June, according to central bank data.
“That’s picking up,” Mr. Rodriguez said. “In fact, we have a dedicated group looking at that specifically. We’re looking at it both ways — from existing customers who would have an SME (small and medium enterprise) segment, so to speak, within the group, plus the specific penetration of SMEs itself.”
He added that the middle-market segment had better repayment levels than the consumer segment since borrowers want to protect the credibility of their businesses.
BDO’s attributable net income rose 6.1% to P22.47 billion in the three months through September from a year earlier on the sustained expansion of its core businesses.
This brought its nine-month earnings to P63.09 billion, 4.07% higher than a year earlier. — Aaron Michael C. Sy
