EastWest Banking Corp., the financial services arm of Filinvest Group, said it secured an approval from Bangko Sentral ng Pilipinas to invest P100 million to establish a financial leasing company.
“This is to inform the exchange that the Bangko Sentral ng Pilipinas, in its letter dated July 26, 2016, approved and confirmed on July 21, 2016, the proposed initial equity investment of East West Banking Corp. in a wholly-owned financial leasing company subject to EastWest’s compliance with regulatory conditions set by BSP,” EastWest said in a disclosure to the stock exchange.
“We shall inform the exchange as soon as we receive approval of the registration of the financial leasing company by the Securities and Exchange Commission,” EastWest said.
EastWest president and chief executive Antonio Moncupa Jr. said in a text message the new company would be called EastWest Leasing and Financing Corp.
“EastWest will put an initial P100 million [investment]. EWLFC completes the product menu of EastWest,” Moncupa said. The bank’s board earlier approved the creation of the leasing firm that will handle EastWest’s financing and leasing businesses.
Moncupa said EastWest would strengthen its asset base from the current P250 billion to P500 billion in the next couple of years to increase earnings.
He said the bank would focus on improving productivity. The bank ended 2015 with total branch network of 433 stores, the fifth largest in the industry, including its rural bank. Moncupa said the current network size of the bank would make it compete fairly with other universal and commercial banks.
Total assets last year reached P232.9 billion or 24 percent higher than in 2014. The bank is starting to benefit from its expansion program, Moncupa said.
Moncupa said the bank was targeting to post a 30-percent growth in net income this year, better than P2 billion in 2015. “If we don’t grow by 30 percent, we will be sad,” he said.
He said both loans and deposits could also grow by around 20 percent, on the back of improving economy.
EastWest realized a net income of P2 billion in 2015, or 3 percent lower than a year ago on lower trading gains, higher credit provisions and higher tax expense.
Total assets increased 24 percent to P232.9 billion. Loans grew 29 percent while deposits increased 25 percent.