EAST WEST Banking Corp. (EastWest Bank) is looking to tap the domestic bond market this semester to diversify its funding sources.

“The plans this year are focused on the peso bonds. So, we are looking at issuing one within the year,” EastWest Bank Senior Executive Vice-President and Financial Markets and Wealth Management Cluster Head Rafael S. Algarra, Jr. said in a media roundtable on Thursday. “We’re still thinking that we should be able to issue in the first half of the year.”

Key considerations for the timing of the issuance are the pace of monetary easing here and abroad and the expected surge in corporate bond offers this year amid lower borrowing costs, Mr. Algarra said.

“Before the start of the year, we were expecting interest rates would be dropping fast, not only here, but globally. But as you know, there’ll be a slowdown in how interest rates will be falling, so we’ll take that into consideration,” he said.

“There will be a lot of issuances this year because there was a lot of pent-up demand last year because companies found the rates high. So, this year, with rates falling, we’ll probably have a lot of issuances from not only banks but companies in general.”

Mr. Algarra added that the bank also plans to issue dollar-denominated bonds once it completes its offer of peso debt.

“You don’t want to compete with everybody else’s issuance. But we expect to issue [peso bonds] this year, barring any significant change in the market environment, and after that, we’ll probably continue to look at the dollar bond. That’s something that we’ve already discussed. But again, it’s something that is in the pipeline, but we haven’t really finalized yet. But definitely, after we finish the issuance of the peso bonds, we’ll be looking at the viability of issuing a dollar bond and the timing, of course,” he said.

“Right now, we have a lot of cash. But it’s still good to issue some bonds from that perspective. Liquidity-wise, we’re quite flush with funds at the moment. I think a lot of banks are, as well. But of course, we have an aggressive growth target. So, you have to manage your balance sheet accordingly,” Mr. Algarra added.

The bank’s loans are expected to grow by 25% this year, he said, steady from the 2024 level, driven by demand for its consumer products.

“We’re quite bullish on credit card, auto loan, and even personal loan. Mortgage, not so much because there’s an overhang of property supply at the moment,” Mr. Algarra said.

“I think the one thing interesting this coming year is the emergence of Chinese brands. The auto exports of China have now gone past Japan’s in 2024… It tells us that Chinese brands will probably have a lot of supply and demand this year. I think you can feel that there’s an increase, but you still have to be very selective because there are a lot of brands to choose from,” he said.

WEALTH MANAGEMENT BOOSTMeanwhile, EastWest Bank’s wealth management segment’s assets under management (AUM) are likely to expand by 20-25% this year, steady from the expected growth in 2024, as the lender targets the transitioning middle class.

“The Philippines continues to grow and that means a lot of investable funds, especially in the middle class, which are moving into the upper middle-income [bracket],” Mr. Algarra told BusinessWorld on the sidelines of the roundtable.

He added that EastWest Priority is looking to tap the affluent segment in areas outside of Metro Manila.

“Our focus is really to grow our AUMs. We are focusing a lot of our effort outside NCR (National Capital Region), outside Metro Manila,” EastWest Bank Chief Investment Officer Bede Lovell S. Gomez likewise said at the same event.

About 80-85% of EastWest Priority’s current client base is in the NCR, Mr. Gomez said.

“We have to grow the balance, so we have as much as possible to grow. I think there’s a lot of untapped growth outside Metro Manila. The multiplier effect of income capacity and untapped funds are still underserved. And it’s growing fast — probably growing faster than Metro Manila,” he added.

He added that other lenders are likewise targeting this segment.

“It’s impossible that we’re the only one who knows that, so we’re competing for that market,” Mr. Gomez said.

EastWest Bank’s attributable net income jumped by 49.1% to P2.32 billion in the third quarter of 2024, bringing its nine-month profit to P5.81 billion, up by 19.57% year on year.

The bank’s shares went up by two centavos or 0.2% to close at P10.04 each on Friday. — Aaron Michael C. Sy