DEVELOPMENT BANK of the Philippines (DBP) is looking to grow its loan portfolio to P419 billion and breach the P800-billion mark for its asset base this year as the bank aims to reach P1 trillion in assets by 2022.
Citing a report from DBP, the Department of Finance said the state-owned bank targets to increase its loan portfolio by 1.19% to P419 billion this year from the P414.06 billion it recorded in 2019. Last year’s level rose 25.88% from the end-2018 total.
“The bank surpassed all its key financial targets in 2019 and recorded substantial growth against the 2018 financial figures,” DBP President and CEO Emmanuel G. Herbosa was quoted as saying in a statement on Thursday. “We are consistently doing what we are mandated to do, which is, to expand our portfolio in the infrastructure sector.”
The bank also expects its assets to grow by seven percent to end this year with P817 billion from P762.17 billion it had last year, and increase this by around 10% annually to reach its P1-trillion goal by 2022.
Of its total assets last year, 54% or P414.06 billion were in loans, the 27.1% or P206.56 billion were invested in treasuries and other ventures, while the remaining 18.57% or P141.55 billion were “investments in other assets.”
After seeing its net profit expand by 5.94% to P6.06 billion in 2019, the bank said it plans to increase this to P6.1 billion this year as well as grow its gross income to P35 billion from last year’s P32.87 billion.
Meanwhile, the bank wants to expand its total deposits by 7.09% to P594 billion this year from P554.63 billion previously.
DBP also wants to grow its capital by 4.5% to P63 billion from P60.29 billion last year.
Mr. Herbosa said due to the bank’s developmental lending nature, its return on assets at 0.85% and return of equity at 10.82% currently compares to the industry’s 1.14% and 10.6% averages, respectively.
“This is also reflected in our higher nonperforming loan ratio of 2.37% as against the industry’s 1.88%. Thus, margins are not as high as the others and [DBP] takes a little more risk,” he said.
“We will continue to help spur the development of micro, small and medium enterprises, assist the newly formed Bangsamoro Autonomous Region in Muslim Mindanao as well as the rest of Mindanao, and forge partnerships in fintech (financial technology) to increase manpower productivity and the digitalization of our operations,” he added.
The bank’s mandate is to provide credit to sectors deemed strategic by the government, especially to infrastructure sector. — Beatrice M. Laforga