Veterans’ bank goes after LGU clients-A A +A
Friday, July 25, 2014
ON TOP of lending to corporate clients, the Philippine Veterans Bank (PVB) is tapping the local government units (LGU) to boost their lending business.
“We are strengthening our grip on the LGU market. We want to make this segment a main driver of the bank’s growth,” said Miguel Angelo Villa-Real, PVB vice-president for corporate communications and marketing services, referring to the numerous LGU projects across the country that the bank can help finance.
The bank said it has shifted its focus from corporate lending and supporting big national projects to LGU lending to support local development projects. Now, 30 percent of its loan portfolio comprises LGU loans.
“Outside of the two government-owned commercial banks, nobody is really looking at the needs of local government. PVB positions itself as a viable alternative bank to these two, rendering efficient service and competitive products that are adaptable and receptive to their development needs,” the bank said.
Of the total P50 billion in deposits as of June 2014, Villa-Real said, P35 billion are government deposits, largely LGU deposits, and those of government-owned and controlled corporations (GOCCs).
Its lending to LGUs has helped move forward infrastructure projects, transport terminals and other developments, Villa-Real said. Loan payments made by LGUs are taken from their combined revenues and Internal Revenue Allotment (IRA) from the National Government.
To reach out to more LGUs in remote areas, he said PVB will tie up with rural banks.
Villa-Real recently visited Cebu to conduct a financial wellness seminar for at least 200 Cebu Capitol employees as the bank’s contribution to the Bangko Sentral ng Pilipinas’s thrust to promote financial literacy
Villa-Real said that employees were taught cash and debt management as well as making wise investments. The country needs to catch up in terms of savings and investments exposure because these activities remained low compared to that of neighboring countries.
He added the half-day seminar is just the start of the bank’s rollout for its LGU clients in Cebu and the Visayas, like Iloilo City and Tagbilaran City in Bohol, among others.
PVB is owned by about 400,000 World War II veterans and their heirs. A substantial portion of its net income is given to the veterans and to projects that benefit their welfare. Compared to commercial banks, PVB accepts government deposits, a privilege that was bestowed as a gesture of gratitude for the heroism of veterans during the last world war.
The bank also announced its plans to double its retail loan portfolio with the expansion of its mortgage lending this year. It is setting aside P2 billion for mortgage lending.
PVB closed 2013 with P6 billion in capital and with a network of 60 branches, 15 of which are in Metro Manila and 45 branches in areas outside the National Capital Region. Two branches are located in Cebu.
Published in the Sun.Star Cebu newspaper on July 26, 2014.