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Salmon Group eyes $2-B loan portfolio in next five years


Financial technology firm Salmon Group Ltd. on Wednesday said it targets to grow its loan portfolio to $2 billion in the next three to five years as it seeks to expand its customer base by catering to what it calls the “neglected” market, and stepping into other countries in Southeast Asia.

According to Salmon co-founder Raffy Montemayor, the firm is looking to reach a $2 billion or P100 billion loan portfolio in the next three to five years, and a $200 million or P10 billion net income from Philippine operations.

“We’re focused on the underserved and underbanked Filipinos and eventually people in Southeast Asia, so ‘yung vision namin (our vision) is to build the best credit-led modern bank for Southeast Asia, starting with the Philippines,” he told reporters in a briefing in Manila.

Salmon in January acquired a 59.7% controlling stake in the Rural Bank of Sta. Rosa (Laguna) Inc. in January, allowing the firm to offer its consumer credit and debit products across the country.

The bank reported a P400 million loan portfolio as of May, which reflected a 648% increase from P54 million in May 2023. This brought its year-to-date revenues stood at P66 million as of May 2024, up 432% from P12 million.  Net income also jumped to P40 million from P1.7 million during the period.

“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 offline and online channels,” Montemayor, who also serves as the rural bank’s chairman, said.

To expand its customer base, Montemayor said the firm is looking at catering to neglected sectors such as blue collar workers including security guards, tricycle drivers, nurses, teachers, call center agents, farmers and agricultural workers.

“They’re the heart of the Philippines’ economy, so those are the people we extend loans to. We’re able to do it in a profitable way, but in a way also, that gives them access to credit, right? That’s our mission, and to be able to scale that up we need the deposits,” he said.

“We do have, of course, a higher percentage of delinquency than the traditional banks, but we have… that’s why we have to make sure that our margins are sufficient or our interest rates are sufficient to cover for that risk,” he added.

The bank has also applied to the Bangko Sentral ng Pilipinas (BSP) for an increase in its authorized capital to P1.2 billion, as it seeks to expand its financial services offerings, enhance its tech and branch infrastructure, and support long-term growth.

The bank currently has two branches — one in Sta. Rosa in Laguna, and the other in Bacoor, Cavite. It plans to expand with three more branches set to be located in Metro Manila, Cebu, and another in Mindanao possibly in Cagayan de Oro or in Davao.

“We expect that to happen by next year. I would say first half of next year is our target… There’s a BSP process for getting that approved,” Montemayor said.

The bank and Salmon Group are supported by shareholders including the International Finance Corp. (IFC), Singapore-headquartered private equity and venture capital fund manager Northstar Group, and Abu Dhabi’s sovereign wealth fund ADQ, among others.—RF, GMA Integrated News