Salmon Group Ltd. has announced its target to expand its loan portfolio to US$2 billion over the next three to five years, with plans to extend its reach to other Southeast Asian countries. This ambitious growth strategy aims to cater to what it identifies as the “neglected” market, including underserved and underbanked individuals.

Salmon co-founder Raffy Montemayor outlined the goal of achieving a US$2 billion or P100 billion loan portfolio, and a US$200 million or P10 billion net income from Philippine operations within the set timeframe.

“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,”

Raffy shared during a briefing in Manila.

In January, Salmon acquired a 59.7% controlling stake in the Rural Bank of Sta. Rosa (Laguna) Inc., facilitating the nationwide offer of its consumer credit and debit products. The bank’s loan portfolio saw a substantial rise to P400 million as of May, a significant increase from P54 million in May 2023, marking a 648% growth.

Year-to-date revenues reached P66 million as of May 2024, up 432% from P12 million, while net income surged to P40 million from P1.7 million during the same period.

Raffy, also serving as the rural bank’s chairman, emphasised the strong start in building a robust financial institution by improving products and services and enhancing customer experience across both offline and online channels.

The firm aims to support sectors such as blue-collar workers, including security guards, tricycle drivers, nurses, teachers, call centre 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 stated.

Raffy acknowledged the higher delinquency rates compared to traditional banks, but highlighted the importance of ensuring sufficient margins or interest rates to cover the associated risks.

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

Currently, the bank operates two branches in Sta. Rosa, Laguna, and Bacoor, Cavite, with plans to open three more branches in Metro Manila, Cebu, and potentially in Cagayan de Oro or Davao in Mindanao by the first half of next year, pending BSP approval.

The expansion efforts are supported by shareholders including the International Finance Corp. (IFC), Singapore-based Northstar Group, and Abu Dhabi’s sovereign wealth fund ADQ, among others.