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Thursday, December 7, 2023

BPI targets 20% growth in sustainable loans in 2020

THE Bank of the Philippine Islands (BPI) is targeting a 20% growth in its sustainable loan portfolio by next year.
On the sidelines of a company event on Friday evening, BPI President and CEO Cezar P. Consing said the bank is looking to grow its sustainable loan book, which currently accounts for 10% of the total loan portfolio.
“What we’re trying is to improve our ratio… 10% of our loan book is sustainable and our renewable to non-renewable (ratio) is 50-50%, more or less. That 10% has to grow and the 50-50 has to overtime swing in favor of renewables but this takes time,” Mr. Consing told reporters.
BPI Head of Corporate Credit Junie Veloso said that the Ayala-led bank is targeting to increase its P130-billion sustainable financing portfolio by 20% next year.
“For the renewable energy and sustainable portfolio, it’s P100-P150 billion. Our target is to grow that by 20% next year. This is a long-term vision. Moving forward, we want to become more sustainable by pushing for sustainable financing,” Mr. Veloso said on the sidelines of the bank’s Sustainable Development Finance launch on Friday.
The bank’s Sustainable Energy Finance (SEF) portfolio has cumulative availed loans of over P130 billion as of June, majority of which or 63% are classified as renewable energy, while the remaining fall under energy efficiency (21%) and climate resilience (16%), according to Jo Ann B. Eala, head of sustainable development finance at BPI.
“We have a total of 330 projects funded already, almost half of that goes to energy efficiency, which refers to projects that bring down electricity consumption. You bring down electricity consumption and increase efficiency first, before you go to the sexier renewables,” Ms. Eala said during the same event.
However, Mr. Veloso said the bank’s funding has always been available but there is a lack of eligible projects.
“Our problem is less our desire to grow it but the availability of financeable projects. Capacity (of renewables) are smaller as compared to fossils like coal plants which are much bigger. Hopefully we can find those small ones so we can hit our growth target… Typically, when we say renewables, malaki na ang 50 megawatts for a single project (50 megawatts is relatively big),” he explained.
“Remember, we can only lend to projects that are there, the projects have to be there. If not, there’s nothing that we can do. It takes a while to develop them to the point that they are financeable,” Mr. Consing said.
While the bank is boosting its support to renewable energy, BPI Head of Corporate Banking John C. Syquia said that the bank is also pushing for energy conservation, arguing that “even if it were clean energy, you also want to use less of it”.
In September, the lender raised $300 million in ASEAN green bonds, a drawdown from it medium-term note (MTN) program to finance eligible projects under its Green Finance Framework.
BPI’s Green Finance Framework was launched in June, providing guidelines for any green bonds or loans issued by the bank, including the evaluation and selection of eligible projects, management of proceeds, and reporting, among others.
The Ayala-led bank’s net income stood at P22.03 billion in the first nine months of the year, 29.5% higher than the P17.01 billion posted a year ago.

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