By Donnabelle Gatdula 
The Philippine Star


MANILA, Philippines - East West Banking Corp., the banking arm of the Gotianun Group, has purchased about P1 billion worth of receivables of sister firm Filinvest Land Inc. in a bid to increase the bank’s mortgage portfolio. 

In an investors’ briefing paper submitted to the Philippine Stock Exchange (PSE), EastWest said it has started tapping into FLI’s more mature portfolio to support the bank’s overall residential mortgage loan program. 

FLI, also owned by the Gotianun family, has accumulated an extensive, well-located, low-cost landbank. As of end-2010, FLI’s landbank stood at 2,369 hectares, bulk of which is located just outside Metro Manila – in the nearby provinces of Rizal, Bulacan, Batangas, Cavite and Laguna – as well as in growth areas such as Cebu, Davao and Gen. Santos City in South Cotabato province. 

“We’ll continue to work with FLI on increasing our mortgage book,” East West said. 

EastWest said while over 50 percent of its portfolio is still in consumer loan, “the target portfolio mix is envisaged to be optimal in terms of risk-adjusted returns for the bank.” 

It said they would also be aggressive in the credit card business but pointed out that they would continue to set aside funds that would support this initiative. 

“Our provisioning for credit cards this year is very aggressive as we continue to take advantage of growth opportunities in this segment. 2011 credit costs were also unusually low due to release of excess provisions,” it said. 

The bank’s non-performing loan level, it said, has steadily been improving.