Globe Telecom CEO sees stock trade, loans as next profit source

Globe Telecom Inc. is pursuing mobile stock trading and lending to unserved consumers as growth from its traditional business tapers off, President Ernest L. Cu said.

Globe, which counts Singapore Telecommunications Ltd. and conglomerate Ayala Corp. as its largest shareholders, is building its lending business through its GCash platform which already has a loan portfolio of P40 billion ($680 million).

“We’re trying to broaden access to loans and lending to a sector that normally would go to the informal one, where interest rates are very high,” Mr. Cu said in an interview with Bloomberg TV’s Haslinda Amin.

Globe and the Philippine Stock Exchange will this month introduce a mobile stock trading service, aimed at expanding the local equity market’s retail investors base. Mr. Cu expects its take-up to be as “tremendous” as the other financial services that’s been added to GCash.

“When banks asked us to acquire deposit accounts for them as a channel, hundreds of thousands come in, something that’s never been seen before,” Mr. Cu said. “I presume it will be in the millions. Hopefully, it will even double what’s going on at the exchange today or even triple. But that being said it will be a smaller amount of money.”

Like its peers worldwide, the biggest challenge facing Globe is growth, which is tapering off as traditional mobile service has matured, Mr. Cu said. The company will reduce its capital spending expenditure and continue “deleveraging” in 2023, he said.

“It’s very rare in industries around the world to find businesses with 50% margin and we continue to maintain that and that provides us the base and capital to build the GCash of the world,” Mr. Cu said. — Bloomberg