MANILA, Philippines – Rizal Commercial Banking Corp. (RCBC) sees its portfolio of home and auto loans grow further towards the end of the year as the country continues to recover from the pandemic-induced recession.
Ramil de Villa, head of RCBC’s Consumer Lending Group, said the company has a strong portfolio of home loans, while auto loans are expected to grow in the fourth quarter.
“For mortgages, we have a growing pipeline. Over the next two quarters, mortgages will grow steadily to meet their target,” De Villa said.
In the first quarter, De Villa said RCBC outperformed its consumer lending performance, with mortgage and auto loans at 1.3 billion pesos and 1 billion pesos in sales, respectively.
RCBC said auto and home loans accounted for 20% of the bank’s total loan portfolio in March.
The Yuchengco-led bank’s profits jumped 36% to 2.1 billion pesos in the first quarter, from 1.58 billion pesos in the same quarter last year, while its total assets rose 20% to 962 billion pesos.
The bank’s loans as well as receivables and investment securities accounted for 56% and 29% of the total, respectively.
RCBC is a major player in the auto and home loan market.
Philippine banks, De Villa said, saw 9% growth in home loans last year.
Regarding auto loans, RCBC does not expect a significant increase in sales in the third quarter, but an increase in sales in the fourth quarter.
With the planned expansion of the car loan business, De Villa said the bank managed to improve its non-performing assets in terms of repossessed cars by 60-70% between December last year and April this year. .
“There is no more building swell – one of the best indicators that we are doing well in the auto lending business. We will continue to be a relevant player in the auto market, but we will do so with caution,” DeVilla said.
In an effort to reduce instances of default during the pandemic, RCBC has overhauled its defense system and problematic accounts have been placed under the bank’s COVID-19 Assistance Recovery Enhancement (CARE) program at the instead of taking back the purchased units.
Through this program, borrowers were able to recondition their payments and restructure their loans to provide much-needed support at the height of the pandemic.
“We are managing to generate revenue while prudently growing auto loans through better operations and stronger collections. If you have a stronger defense, you can protect your existing portfolio,” De Villa said.
Several banks have authorized the restructuring of loans to help borrowers affected by the global health crisis.
“It gives people a second chance, thereby protecting the wallet,” De Villa said.