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Growth-generating giant: How BPI fosters an inclusive economy

Inclusive economic growth is desired by all sectors in society, and financial institutions are taking part in making this possible. 

Growth-generating giant: How BPI fosters an inclusive economy
BPI is focusing on helping self-employed microentrepreneurs (SEMEs), most of whom have no bank accounts, through BPI Direct BanKo, its microfinance arm. 
This desire has kept the Bank of the Philippine Islands (BPI) busy improving its products and services to make wealth creation more accessible to Filipino households. 

Established in 1851, BPI has been inextricably linked to our country’s economic growth. With its commitment to Clients, People, Shareholders, and Country, the bank has taken advantage of the country’s economic growth to offer what Filipinos need. 

It is BPI’s vision to become the country’s most inclusive bank. It aims to provide the most innovative solutions that satisfy clients’ financial needs while creating shared value and prosperity for all stakeholders. 

Growth-generating giant: How BPI fosters an inclusive economy
Since the Philippines has a growing digitally-savvy population, BPI invests heavily in technology.
Supporting the unbanked, entrepreneurs 

The present administration has made the micro, small and medium enterprises (MSMEs) a priority, recognizing this sector as a significant force in generating jobs and driving the country’s economy. As a result, government financial institutions were directed to develop financing options for MSMEs to reduce their dependence on informal lenders. 

On the other hand, private financial institutions were asked to provide options to help MSMEs. 

BPI has heeded the call of the government, focusing on helping self-employed microentrepreneurs (SEMEs), most of whom have no bank accounts, through BPI Direct BanKo, its microfinance arm. 

BanKo now has over 10,000 clients and more than Php 559 million in loans to clients as of end 2017. It uses a more traditional in-person business approach through financial advisors called BanKoMares and BanKoPares, who go out to wet markets and small business owners who need financing. 

BanKo ended 2017 with 103 branches and micro-banking offices. It aims to reach 200 branches nationwide by the end of the year. 

Earlier this year, BPI also launched its Business Banking group to sharpen its focus on the unique financial needs of clients, particularly the SMEs. The Business Banking Group will cater to over 100,000 BPI clients that maintain deposits, but, for the most part, do not avail of other financial services, including business loans. SME loans currently account for less than 10% of the Bank’s total loan book. 

The Bank intends to further invest in its microfinance and SME business to tap opportunities in the growing market for the unbanked and underserved microfinance segment, as well as the thriving SMEs who still fail to take full advantage of loans available to them. 

All this, ultimately, will help support inclusive growth for a more resilient society. 

Auto and housing loans for all 

The recently enacted Tax Reform for Acceleration and Inclusion (TRAIN) Law effectively reduced personal income tax rates and has resulted in higher disposable incomes for Filipino taxpayers. In turn, the Bank expects stronger growth in the consumer lending market through BPI Family Savings Bank. 

Recognizing that the Philippine economy is consumption-driven, BPI overhauled its consumer loan processes in 2017 to improve turnaround times for auto and housing loans. The impact of its improvements for the auto and housing loans is expected to be realized this year. 

In 2017, BPI has registered P12.2 billion in total loans for affordable housing. The auto loans business catered to 102,000 clients in the same period. 

Its card business (credit, debit, and prepaid) has also benefited from smart analytics that enhances origination, credit scoring, and fraud detection to improve security. It has over 9 million cardholders and P206 billion in transactions across all card types. 

At the present, the oldest bank in Southeast Asia is ready to capture a larger share in the retail business covering auto loans, housing loans, and consumer loans through its credit, debit and prepaid cards. 

Long-term digitalization journey 

The Bank has the future in mind. Since the Philippines has a growing digitally-savvy population, BPI invests heavily in technology, both front-end, and back-end processes to significantly improve operational efficiency, security, access and overall customer experience. 

It is the pioneer and leader in local mobile and internet banking. In fact, for the past three years, the total number of unique users of the BPI Mobile App has steadily increased, growing 28% just for 2017. The BPI will continuously provide quality service to the growing number of clients who access the Bank through its mobile app and online facility. In 2017, the uptime rates for mobile banking, express phone and ELink/BizLink reached 99.5%, 100% and 99.43%, respectively. 

“We recognize the importance of building strong digital capabilities by enhancing client access points, as well as improving our back-end systems to spur better productivity, automation, and cost-efficiency. This long-term digitalization journey will complement our physical branches, enabling a more efficient and convenient self-service banking experience while enhancing face-to-face interaction at the branches for our clients’ more complex needs,” said Ramon Jocson, BPI Executive Vice President and Head of Enterprise Services Segment. 

Provincial expansion 

Gross Regional Domestic Product (GRDP) outside Metro Manila has mostly been growing since 2014, especially in the Eastern and Central Visayas, Central Luzon, and Davao Region. However, poverty and inequality are still present across the regions. 

The government is committed to addressing these problems by redirecting investor focus outside Metro Manila, particularly the underdeveloped regions in Visayas and Mindanao. 

“We are cognizant of the need for financial services in the provinces, especially in underdeveloped regions, and the long-term potential that this need implies,” said Cezar Consing, BPI President, and Chief Executive Officer. “That is why we continue to expand our branch network to key growth areas nationwide, at the same time, intensify our push towards digital financial channels and services for better access to more Filipinos.” 

In 2017, the Bank has opened 111 more BPI, BPI Family Savings Bank, and BanKo branches and MBOs, a 13% increase from 2016. The total number of clients in both retail and corporate segments rose to 8.5 million, a 6.6% growth. 

According to its Integrated Report last year, there are 942 branches and MBOs across the archipelago, while there are 3,105 ATMs & CAMs, or Cash Accept Machines. 

Indubitable growth 

Growth-generating giant: How BPI fosters an inclusive economy
Since the Philippines has a growing digitally-savvy population, BPI invests heavily in technology.
With 167 years of providing top-notch financial services, the first bank in the country and in Southeast Asia has grown its assets to Php 1.9 trillion as of 2017. It has the highest profitability ratios among local banks, with a Return on Equity of 12.75% and a Return on Assets of 1.27% in 2017.   

It has received numerous awards, too, including the top spot in the Top Investment Houses of Asian Local Currency Bonds based on the number of votes received from top-rated analysts, economist and strategists, salespeople, and traders.   

BPI’s strategy centers on expansion tempered with financial prudence and risk management. After focusing on efficiency for several years, BPI is embarking on an ambitious growth journey anchored on four strategic priorities: the SME business through the newly-launched Business Bank, the retail and consumer finance business under BPI Family Savings Bank, financial inclusion through BPI Direct BanKo, and digitalization, which cuts across the rest not only through the channels but also the front-end and back-end facilities.

Digitalization, according to Consing, is a key component of financial inclusion, which is all about making financial services available to every Filipino. 

“We intend to digitalize the bank further because only by digitalizing further can we actually become much more financially inclusive,” Consing added. 

Growth-generating giant: How BPI fosters an inclusive economy
BPI overhauled its consumer loan processes in 2017 to improve turnaround times for auto and housing loans.
As a leading bank in the country, BPI hopes that, through its strategic priorities, it can create a foundation for robust and inclusive economic growth for the Philippine nation.

Topics: economic growth , Bank of the Philippine Islands , BPI Direct BanKo , Cezar Consing
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