EastWest Bank expects strong credit card loan growth

EAST WEST Banking Corp. (EastWest Bank) expects its credit card loans to grow by 34% to 36% this year as it continues to grow its consumer segment, an official said on Wednesday.

“Our credit card products may be the third-largest loan product that we have. We expect it to continue to be a big contributor to our overall lending suite of products,” EastWest Bank Consumer Lending Head Lawrence L. Lee told reporters on the sidelines of an event.

“I think last year the industry grew almost 30%. I think we’re at pace to also grow 30% again this year,” Mr. Lee added.

EastWest Bank Credit Cards Head Mia P. Tamayo said the bank already hit its end-2024 target to have 1.4 million cardholders as of September.

Mr. Lee said the bank wants credit card loans to make up a bigger part of its loan book, with the current share at just about 20%.

“We’re planning to grow it. It will probably be a higher contributor to the overall amount,” he added.

EastWest Bank has also seen healthy credit card loan repayments, with nonperforming loans lower than industry levels, Mr. Lee said.

“I think the challenge with the credit cards business is if you have healthy ratios in terms of risk, the profitability is lower also. It’s a high-risk, high-reward, low-risk, low-reward business.”

The Philippines’ robust, consumption-driven economic growth will support the credit card industry’s expansion this year, Mr. Lee said.

“After the pandemic, there was revenge spending and revenge travel. There was an expectation that things will taper off, but I think people are still spending. Overall, our economy is doing okay. We’re growing as per the expectation of the government. So, I think the expectation is to continue to be robust.”

Ms. Tamayo added that the country’s favorable demographics and the central bank’s push for financial education and cashless payments will also drive the card industry’s growth.

“We have a very young market, and as we get more and more financially educated, we are moving — and even the BSP (Bangko Sentral ng Pilipinas) supports this — from a cash-induced transaction society to cashless because there’s a lot of value in it,” she said.

EastWest Bank saw its net income rise by 3.69% year on year to P1.79 billion in the second quarter.

Its shares closed at P9.75 apiece on Thursday, down by seven centavos or 0.71% from the previous day’s finish. — A.M.C. Sy