HIGHER LOAN PORTFOLIO. Salmon's co-founder and Rural Bank of Sta. Rosa's chairman Raffy Montemayor in a briefing on Wednesday (June 19, 2024) says they are aiming to increase their loan portfolio to USD2 billion in the next five years. The Salmon Group acquired a 59.7-percent controlling stake in the Rural Bank of Sta. Rosa in January this year. (Photo by Anna Leah Gonzales)
MANILA – Financial technology firm Salmon Group Ltd. said on Wednesday it is eyeing a significant increase in its loan portfolio in the next three to five years.
"What I can share is where we want to be in three to five years. We want to have a USD2 billion loan portfolio. So that's like PHP100 billion loan portfolio. And then a USD200 million annual net income from the Philippines alone or PHP10 billion in net income," Rural Bank of Sta. Rosa’s chairman and Salmon’s co-founder Raffy Montemayor said in a briefing at the Century Park Hotel in Manila.
In January this year, the fintech firm acquired a 59.7-percent controlling stake in the Rural Bank of Sta. Rosa (Laguna) Inc.
"We closed the sale in January this year and the past few months, we've been integrating the bank into our operations," Montemayor said.
Following the acquisition, Montemayor said the bank’s total deposits rose by 439 percent, reaching PHP440 million in May 2024, up from PHP82 million in the same period last year.
This growth in deposits is largely driven by the bank's time deposit rates, including its 8.88-percent interest rate per annum for time deposits exceeding PHP500,000 for a 12-month term.
The bank has deployed these new deposits to acquire installment loans and cash loans from Sunprime Finance Inc., its sister company that lends to underserved and underbanked Filipinos.
As a result, the bank's loan portfolio increased by 648 percent to PHP400 million from PHP54 million in May 2023, while year-to-date revenue also rose to PHP66 million.
"We are off to a strong start in building a robust financial institution by improving the bank’s products and services and enhancing our customer experience across both offline and online channels," Montemayor said.
Montemayor said the increase in deposits and profitable loans will allow them to scale up operations.
Salmon also injected fresh capital into the bank so that it can invest in technology and in people to prepare for its mobile app and debit card launch, which is slated for the second half of this year, subject to Bangko Sentral ng Pilipinas (BSP) approval.
This capital injection led to the bank’s equity climbing to PHP385 million in June, a 1,075-percent increase year-on-year.
The bank also applied to the BSP for an increase in its authorized capital to PHP1.2 billion to further expand its financial services offerings and enhance its technology and branch infrastructure to support long-term growth.
The Rural Bank of Sta. Rosa which currently has two branches located in Bacoor, Cavite and in Sta. Rosa, Laguna, will also have three additional branches next year. These will be located in Metro Manila, Cebu, and Davao or Cagayan de Oro.
"We expect that to happen by next year. I would say first half of next year is our target," Montemayor said.
Salmon and the Rural Bank of Sta. Rosa are supported by the International Finance Corporation, a member of the World Bank Group; Northstar Group, a Singapore-headquartered private equity and venture capital fund manager; ADQ, the sovereign wealth fund of Abu Dhabi; and other international and Filipino investors.
Founded in July 2022, Salmon leverages artificial intelligence-enabled technology and a proprietary credit engine to offer consumer loans such as Salmon Credit, Salmon Installment, and Salmon Cash Loans. (PNA)
