Security Bank says retail, MSMEs to spur loan growth in 2025

Security Bank Corp. is betting on strong demand in the retail and micro, small and medium enterprise (MSME) segments to drive loan growth in 2025, with the bank expecting interest rate cuts to spur consumer spending.

This projection is based on Security Bank’s performance so far this year, as overall loan growth exceeded previous projections, according to chief finance officer Eduardo Olbes.

“Demand for both retail and MSME loans continue to remain strong,” Olbes said in a media chat last week. “On the corporate side, demand is stronger than what we had expected early in the year.”

Security Bank earlier projected the retail segment’s growth to be around 15 percent, but actual growth as of end-September was at 18.55 percent.

Meanwhile, consumer loans have grown “significantly faster than expected” at more than 30 percent versus Security Bank’s earlier expectation of 14 percent to 15 percent.

MSME loans, which make up 3 percent of Security Bank’s portfolio, have likewise shown robust growth at 60 percent in the first nine months of the year.

”We will continue to grow our exposure to MSMEs,” Olbes said, adding that these entrepreneurs also tapped banks for cash management and payment collection from customers.

“The growth has been quite healthy, both for MSME and retail, and at the moment, we would expect that to continue for 2025 as well,” he added.

This comes amid prospects of a cumulative 100-basis-point interest rate cut next year that could trigger heightened consumer spending as borrowing costs decline.

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At the same time, Olbes said they planned to tap the debt market in 2025 to refinance two maturing loans.

He clarified, however, that they had no set schedule yet for these bond issuances since they wanted to wait for further monetary policy easing.

Lower interest rates typically make bonds more attractive to investors, as new issuances could provide higher yields.

In August, Security Bank raised P20 billion from its bond issuance. The bonds, which will mature in five years and one month, promised a yield of 6.05 percent per annum to lenders.