EAST WEST Banking Corp. (EastWest Bank) is optimistic about its profit growth this year as it continues to expand its lending business.
“I think we will continue to do well. It’s the focus of the segment — industries and so on. I think we have a good strategy in place and we’re executing it quite well. And then, we’re getting more efficient. We’re trying to get more efficiency and digital capabilities. They’re all coming together… So, we’re optimistic, as always,” EastWest Bank Chief Executive Officer Jerry G. Ngo told reporters on the sidelines of an event last week.
However, it could be hard to top the strong earnings growth that the bank posted in 2024 due to base effects, he said. EastWest Bank’s net income rose by 25% to an all-time high of P7.6 billion last year.
“As you grow bigger, the base effect kicks in. So, we just need to be a bit more balanced in our outlook as we get bigger. But hopefully, we’ll also not just get the same trajectory, but also become more efficient [so that the] underlying performance is better — changing the way we do things,” Mr. Ngo said.
The Gotianun-led bank expects continued lending growth as it expands into various market segments as seen in its recent rollout of co-branded credit cards, with the latest being one in partnership with listed retailer Puregold Price Club, Inc.
“We’re starting to get more collaborations… Hopefully we’ll be doing more,” Mr. Ngo said. “But the loan growth is already fairly large. Again, we need to do more. I’m hoping it has a big impact.”
Potential rate cuts from the central bank could also support overall loan growth, he added.
“Personally, I wish for them to cut because it’s really helpful from a lending perspective. It’s all about the financing cost. [Lower] financing cost creates access to financing. Access to financing leads to consumption. Consumption leads to economic activity, which is what we really need at this point in time,” Mr. Ngo said.
A BusinessWorld poll conducted last week showed that all 17 analysts surveyed expect the Monetary Board to reduce its target reverse repurchase rate by 25 basis points (bps) to 5.5% at its April 10 meeting.
This would mark its first easing move since December and after the Bangko Sentral ng Pilipinas unexpectedly kept benchmark interest rates steady in February to assess the potential impact of the Trump administration’s evolving policies on the Philippine economy.
The Monetary Board has brought down borrowing costs by a cumulative 75 bps since it began its easing cycle in August last year. — Aaron Michael C. Sy
