Philippines’ Oldest Lender BPI Shows Interest in Buying Citi’s Local Retail Banking

(Bloomberg) -- Bank of the Philippine Islands is interested in buying Citigroup Inc.’s retail business in the Southeast Asian nation as the country’s oldest lender girds for lending pickup after the pandemic, President TG Limcaoco said.

“We have told them that as soon as there is any information, we will take a look at it and most likely, we will be interested,” he said at a briefing, referring to Citigroup’s retail banking business. “We have sufficient capital to fund it internally” should an investment happen, said Limcaoco, who took over from Cezar Consing on Thursday.

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The Philippine lender, which announced a 21.7% year-on-year drop in first quarter net income after a 3.6 billion peso ($74.4 million) loss provision, expects about 4% of its loans to sour this year as the pandemic continues to hurt businesses. BPI, as the bank is known, targets to halve its outstanding coal loans by end 2026, Consing said during the annual shareholders meeting.

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BPI plans to invest 10% of its revenue this year on financial technology, CFO Theresa Marcial said at the briefing. First quarter net income fell to 5 billion pesos while revenue dropped 1.5% to 24.3 billion pesos, according to a statement. Net interest income slid by 6.5% while non-interest income rose 12.1% to 7.4 billion pesos, boosted by higher fees from bancassurance, asset management, investment banking.

Other Highlights

• BPI intends to achieve zero coal financing in line with Paris Agreement target of 2037 for non-OECD Asia, said Consing, who will remain in the bank’s board
• BPI’s merger with its wholly owned thrift bank unit BPI Family Savings Bank approved by shareholders on Thursday is among the lender’s measures to “future proof” itself, Consing said, along with boosting consumer loans and lending to small and medium enterprises
• BPI’s non-performing loans was at 2.76% of total loans in the first quarter

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